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): June 15, 2018

 

nuveen

Nuveen Global Cities REIT, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Maryland

333-222231

82-1419222

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

730 Third Avenue, 3rd Floor

New York, NY

 

10017

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (212) 490-9000

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 Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. 

 

 

 

 


Explanatory Note

 

Nuveen Global Cities REIT, Inc. (the “Company” or “NREIT”) previously filed a Current Report on Form 8-K, filed on June 18, 2018, disclosing the acquisition of the property known as 2282 and 2300 Defoor Hills (“Defoor Hills”) on June 15, 2018.

 

This Amendment to the Current Report on Form 8-K, filed on June 18, 2018, is being filed solely to provide the required audited and unaudited combined statements of revenues and certain expenses under Rule 3-14 of Regulation S-X with respect to Defoor Hills acquired by the Company.  Additionally, this report presents the required pro forma financial information reflecting the impact of the Defoor Hills transaction on the Company.  The Company intends to make an election to be treated as a real estate investment trust for federal income tax purposes beginning with the taxable year ending December 31, 2018 and as such, the estimated taxable operating results are excluded from this report.

 

The Company’s results with respect to this acquisition may be materially different from those expressed in this report due to various factors, including but not limited to those discussed in the Company’s Registration Statement on Form S-11 (File No. 333-222231), as amended.

 

Item 9.01. Financial Statements and Exhibits.

 

(a) Financial statements of Real Estate Acquired

 

Independent Auditors’ Report;

 

Audited combined statement of revenues and certain expenses for Defoor Hills for the year ended December 31, 2017; and

 

Unaudited combined statement of revenues and certain expenses for Defoor Hills for the three months ended March 31, 2018

 

(b) Pro forma financial information.

 

Unaudited pro forma condensed consolidated balance sheet at March 31, 2018;

 

Unaudited pro forma condensed consolidated statement of operations for the three months ended March 31, 2018; and

 

Unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2017.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Item 9.01 (a)

 

INDEPENDENT AUDITORS’ REPORT

 

 

To the Owners

Nuveen Global Cities REIT, Inc.

 

Report on the Financial Statement

 

We have audited the accompanying combined statement of revenues and certain expenses of 2282 and 2300 Defoor Hills Rd (the “Properties”) for the year ended December 31, 2017, and the related notes to the combined statement of revenues and certain expenses.

 

Management's Responsibility for the Financial Statement

 

Management is responsible for the preparation and fair presentation of this financial statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that is free from material misstatement, whether due to fraud or error.

 

Auditors’ Responsibility

 

Our responsibility is to express an opinion on the financial statement based on our audit.  We conducted our audit in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free from material misstatement.

 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement.  The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error.  In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.

 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 

Opinion

 

In our opinion, the financial statement referred to above presents fairly, in all material respects, the combined revenues and certain expenses, described in Note 2, of the Properties for the year ended December 31, 2017, in accordance with accounting principles generally accepted in the United States of America.

 

Emphasis of Matter

 

We draw attention to Note 2 to the financial statement, which describes that the accompanying combined financial statement was prepared for the purpose of complying with rules and regulations of the U.S. Securities and Exchange Commission and it is not intended to be a complete presentation of the Properties’ combined revenues and certain expenses. Our opinion is not modified with respect to that matter.

 

/s/ Marcum llp

 

Marcum llp

Roseland, NJ

July 20, 2018

 

 

 

 

 


 

2282 AND 2230 DEFOOR HILLS RD

COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2017

AND THE THREE MONTHS ENDED MARCH 31, 2018 (UNAUDITED)

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

March 31, 2018

 

 

Year Ended

 

 

 

(Unaudited)

 

 

December 31, 2017

 

Revenues

 

 

 

 

 

 

 

 

Rental revenue

 

$

532,437

 

 

$

78,080

 

Parking income

 

 

-

 

 

 

12,550

 

Tenant reimbursements

 

 

104,704

 

 

 

8,424

 

 

 

 

 

 

 

 

 

 

Total Revenues

 

 

637,141

 

 

 

99,054

 

 

 

 

 

 

 

 

 

 

Certain Expenses

 

 

 

 

 

 

 

 

General and administrative

 

 

30,238

 

 

 

100,899

 

Repairs and maintenance

 

 

12,089

 

 

 

60,456

 

Utilities

 

 

24,265

 

 

 

62,074

 

Real estate taxes and insurance

 

 

36,725

 

 

 

141,023

 

 

 

 

 

 

 

 

 

 

Total Certain Expenses

 

 

103,317

 

 

 

364,452

 

 

 

 

 

 

 

 

 

 

Revenues in Excess of Certain Expenses

 

 

 

 

 

 

 

 

   (Certain Expenses in Excess of Revenues)

 

$

533,824

 

 

$

(265,398

)

 

 

The accompanying notes are an integral part of the combined statements of revenues and certain expenses.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

2282 AND 2230 DEFOOR HILLS RD

NOTES TO COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2017 AND

THE THREE MONTHS ENDED MARCH 31, 2018 (UNAUDITED)

 

 

Note 1 – Organization and Description of Business

 

The accompanying combined statements of revenues and certain expenses include the operations of 2282 and 2300 Defoor Hills Rd (the “Properties”), which consist of two office properties, with approximately 91,000 (unaudited) square feet of rentable space, located in Atlanta, GA:

 

PROPERTY

 

ADDRESS

 

RBA (SF)

 

2282 Defoor Hills

 

2282 Defoor Hills Rd, Atlanta, GA

 

 

30,060

 

2300 Defoor Hills

 

2300 Defoor Hills Rd, Atlanta, GA

 

 

60,760

 

 

 

 

 

 

90,820

 

 

On May 15, 2018, THRE Global Investments LLC (the “Buyer”) entered into a purchase and sale agreement with SHW Wyatt Defoor Hills LLC and SWH Wyatt 2282 Defoor Hills LLC (collectively the “Seller”) to acquire the Properties for a purchase price of $34.6 million. On June 15, 2018, the Buyer assigned its right, title and interest in and to the purchase and sale agreement to NR Defoor Hills LLC (the “Company”).

 

 

Note 2 – Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying combined statement of revenues and certain expenses have been prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended. Accordingly, the statements are not representative of the actual results of operations for the periods presented as revenues and certain expenses, which may not be directly attributable to the revenues and expenses to be incurred in the future operations of the Properties, have been excluded. Such excluded items include depreciation and amortization, related party fees, management fees, and non-recurring professional fees.

 

Interim Unaudited Information

 

The statement of revenues and certain expenses for the three-months ended March 31, 2018 is unaudited. In the opinion of the Company, such statement reflects all adjustments necessary for a fair presentation of revenues and certain expenses in accordance with Rule 3-14 of Regulation S-X as described above. All such adjustments are of a normal recurring nature.

 

Use of Estimates

 

The preparation of a financial statement in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that in certain circumstances may affect the reporting and disclosure of revenues and certain expenses. Actual results could materially differ from these estimates.

 

Revenue Recognition

 

Rental revenue includes base rents that each tenant pays in accordance with the terms of its respective lease and is reported on a straight-line basis over the non-cancellable term of the lease which includes the effects of rent steps and rent abatements, if any, under the leases. The Company commences rental revenue recognition when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use.

 

Tenant reimbursements related to reimbursements of common area maintenance, insurance and real estate taxes are recognized as revenue in the period the applicable expenses are incurred.

 

 

 

 

 

 


 

2282 AND 2230 DEFOOR HILLS RD

NOTES TO COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2017 AND

THE THREE MONTHS ENDED MARCH 31, 2018 (UNAUDITED)

 

Note 3 – Minimum Future Lease Rentals

 

As of March 31, 2018, the Properties lease space to three tenants under leases expiring on various dates through May 2030.  Approximate future minimum operating lease payments to be collected under non-cancelable leases, excluding other lease payments that are not fixed and determinable, in effect as of March 31, 2018, are as follows by year: 

 

 

2018

 

$

377,000

 

2019

 

 

1,936,000

 

2020

 

 

2,064,000

 

2021

 

 

2,121,000

 

2022

 

 

2,179,000

 

Thereafter

 

 

16,223,000

 

 

 

 

 

 

Total

 

$

24,900,000

 

 

 

Note 4 – Concentration of Credit Risk

 

For the year ended December 31, 2017 and for the three months ended March 31, 2018 (unaudited), one tenant contributed to 100% and 89%, respectively of the rental revenue for the Properties.

 

 

Note 5 – Subsequent Events

 

The Company has evaluated events and transactions for potential recognition or disclosure through July 20, 2018, the date the financial statement was available to be issued.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Item 9.01(b)

 

Nuveen Global Cities REIT, Inc.

Pro Forma Condensed Consolidated Financial Statements

(Unaudited)

 

 

On June 15, 2018, the Company completed the acquisition of the property known as Defoor Hills.  The Company funded the acquisition with cash on hand. Defoor Hills is a 90,820 square foot adaptive reuse/creative office project built in 1970 and redeveloped in 2017. Defoor Hills is 100% leased to three tenants with a weighted average lease term of 11 years.

 

The unaudited pro forma condensed consolidated balance sheet as of March 31, 2018 is presented as if the Defoor Hills acquisition was completed on March 31, 2018.

 

The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2018 and for the year ended December 31, 2017, are presented as if the Defoor Hills acquisition was completed on January 1, 2017.

 

The following unaudited pro forma condensed consolidated financial statements have been prepared to comply with Article 11 of Regulation S-X, as promulgated by the SEC.  The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the financial statements of the Company and notes thereto presented in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2018 and Special Report on Form 10-K for the year ended December 31, 2017.  The unaudited pro forma balance sheet and income statements are not necessarily indicative of what the actual financial position and operating results would have been had the Defoor Hills acquisition occurred on March 31, 2018 and January 1, 2017, respectively, nor are they indicative of future operating results of the Company.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Nuveen Global Cities REIT, Inc.

Pro Forma Condensed Consolidated Balance Sheet

As of March 31, 2018

(Unaudited, in thousands, except share and per share data)

 

 

 

 

  

 

NREIT

 

 

Defoor Hills

 

 

NREIT

 

 

 

Historical

 

 

Acquisition

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Investments in real estate, net

 

$

114,021

 

 

$

30,071

 

(a)

$

144,092

 

Investments in real estate-related securities, at fair value

 

 

20,218

 

 

 

-

 

 

 

20,218

 

Cash and cash equivalents

 

 

60,861

 

 

 

(33,720

)

(b)

 

27,141

 

Intangible assets, net

 

 

6,359

 

 

 

3,737

 

(a)

 

10,096

 

Other assets

 

 

578

 

 

 

-

 

 

 

578

 

Total assets

 

$

202,037

 

 

$

88

 

 

$

202,125

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable, accrued expenses, and other liabilities

 

$

2,762

 

 

$

88

 

(c)

$

2,850

 

Due to affiliates

 

 

3,383

 

 

 

-

 

 

 

3,383

 

Intangible liabilities, net

 

 

234

 

 

 

-

 

 

 

234

 

Total liabilities

 

$

6,379

 

 

$

88

 

 

$

6,467

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

Common stock - Class N shares, $0.01 par value per share, 100,000,000 shares authorized, 20,000,000 shares issued and outstanding at March 31, 2018

 

 

200

 

 

 

-

 

 

 

200

 

Additional paid-in capital

 

 

197,301

 

 

 

-

 

 

 

197,301

 

Accumulated deficit

 

 

(1,843

)

 

 

-

 

 

 

(1,843

)

Total equity

 

 

195,658

 

 

 

-

 

 

 

195,658

 

Total liabilities and equity

 

$

202,037

 

 

$

88

 

 

$

202,125

 

 

 

 

(a)

Represents the purchase price of the Defoor Hills acquisition, including transactions costs, as if the transaction was completed as of March 31, 2018.  The Company determined this acquisition was an asset acquisition in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and allocated the total purchase price to the assets acquired based on relative fair value.  The following table details the allocation of the Defoor Hills purchase price:

 

 

 

March 31, 2018

 

 

Useful Lives

Building and building improvements

 

$

25,600

 

 

5 - 40 years

Land and land improvements

 

 

4,471

 

 

15 years

In-place lease intangibles

 

 

1,965

 

 

5 - 12 years

Other intangibles

 

 

1,772

 

 

Less than 1 -  12 years

Total purchase price

 

$

33,808

 

 

 

 

 

 

(b)

The Defoor Hills acquisition was funded using the Company’s cash on hand.  

 

 

(c)

Represents credits provided to the Company at closing related to the proration of property taxes ($51) and adjustments for prepaid rent and security deposits ($37).

 

 

 

 

 

 

 

 

 


 

Nuveen Global Cities REIT, Inc.

Pro Forma Condensed Consolidated Statement of Operations

For the Three Months Ended March 31, 2018

(Unaudited, in thousands, except share and per share data)

 

 

 

  

 

NREIT

 

 

Defoor Hills

 

 

Pro Forma

 

 

NREIT

 

 

 

Historical

 

 

Acquisition

 

 

Adjustments

 

 

Pro Forma

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental revenue

 

$

2,268

 

 

$

532

 

(a)

$

-

 

 

$

2,800

 

Tenant reimbursement income

 

 

554

 

 

 

105

 

(a)

 

-

 

 

 

659

 

Total revenues

 

 

2,822

 

 

 

637

 

 

 

-

 

 

 

3,459

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental property operating expenses

 

 

966

 

 

 

73

 

(a)(b)

 

-

 

 

 

1,039

 

General and administrative expenses

 

 

1,691

 

 

 

30

 

(a)

 

-

 

 

 

1,721

 

Advisory fee

 

 

295

 

 

 

-

 

 

 

-

 

 

 

295

 

Depreciation and amortization

 

 

1,773

 

 

 

-

 

 

 

278

 

(c)

 

2,051

 

Total expenses

 

 

4,725

 

 

 

103

 

 

 

278

 

 

 

5,106

 

Other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from real estate-related securities

 

 

388

 

 

 

-

 

 

 

-

 

 

 

388

 

Total other income

 

 

388

 

 

 

-

 

 

 

-

 

 

 

388

 

Net loss

 

$

(1,515

)

 

$

534

 

 

$

(278

)

 

$

(1,259

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share of common stock - basic and diluted

 

$

(0.08

)

 

 

 

 

 

 

 

 

 

$

(0.07

)

Weighted-average shares of common stock outstanding, basic and diluted

 

 

18,148,333

 

 

 

 

 

 

 

 

 

 

 

18,148,333

 

 

 

 

(a)

Represents the operating results attributable to Defoor Hills for the three months ended March 31, 2018.

 

 

(b)

The following table details the rental property operating expenses for Defoor Hills for the three months ended March 31, 2018:

 

 

Defoor Hills

 

Repairs and maintenance

 

$

12

 

Utilities

 

 

24

 

Real estate taxes and insurance

 

 

37

 

Total

 

$

73

 

 

 

 

 

 

 

 

 

 

(c)

Represents depreciation and amortization expense for the Defoor Hills assets for the three months ended March 31, 2018.  The Company records depreciation and amortization on a straight-line basis.  The following table details the depreciation and amortization expense for the three months ended March 31, 2018:

 

 

Defoor Hills

 

Depreciation expense

 

$

190

 

Amortization expense

 

 

88

 

Total

 

$

278

 

 

 

 

 

 

 

 

 

 


 

Nuveen Global Cities REIT, Inc.

Pro Forma Condensed Consolidated Statement of Operations

For the Year Ended December 31, 2017

(Unaudited, in thousands, except share and per share data)

 

 

  

 

NREIT

 

 

Defoor Hills

 

 

Pro Forma

 

 

NREIT

 

 

 

Historical (a)

 

 

Acquisition

 

 

Adjustments

 

 

Pro Forma

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental revenue

 

$

374

 

 

$

78

 

(b)

$

-

 

 

$

452

 

Tenant reimbursement and parking income

 

 

16

 

 

 

21

 

(b)

 

-

 

 

 

37

 

Total revenues

 

 

390

 

 

 

99

 

 

 

-

 

 

 

489

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental property operating expenses

 

 

175

 

 

 

263

 

(b)(c)

 

-

 

 

 

438

 

General and administrative expenses

 

 

238

 

 

 

101

 

(b)

 

-

 

 

 

339

 

Advisory fee

 

 

44

 

 

 

-

 

 

 

-

 

 

 

44

 

Depreciation and amortization

 

 

261

 

 

 

-

 

 

 

1,110

 

(d)

 

1,371

 

Total expenses

 

 

718

 

 

 

364

 

 

 

1,110

 

 

 

2,192

 

Net loss

 

$

(328

)

 

$

(265

)

 

$

(1,110

)

 

$

(1,703

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share of common stock - basic and diluted

 

$

(0.30

)

 

 

 

 

 

 

 

 

 

$

(1.55

)

Weighted-average shares of common stock outstanding, basic and diluted

 

 

1,099,405

 

 

 

 

 

 

 

 

 

 

 

1,099,405

 

 

 

 

(a)

Historical financial information obtained from NREIT’s 2017 Special Report on Form 10-K.  As noted in the Special Report, NREIT was formed on May 1, 2017 and subsequently capitalized on May 19, 2017. The Company’s real estate operations did not commence until December 2017.

 

 

(b)

Represents the operating results attributable to Defoor Hills for the year ended December 31, 2017.

 

 

(c)

The following table details the rental property operating expenses for Defoor Hills for the year ended December 31, 2017:

 

 

 

Defoor Hills

 

Repairs and maintenance

 

$

60

 

Utilities

 

 

62

 

Real estate taxes and insurance

 

 

141

 

Total

 

$

263

 

 

 

 

 

 

 

 

 

(d)

Represents depreciation and amortization expense for the Defoor Hills assets for the year ended December 31, 2017.  The Company records depreciation and amortization on a straight-line basis.  The following table details the depreciation and amortization expense for the year ended December 31, 2017:

 

 

Defoor Hills

 

Depreciation expense

 

$

760

 

Amortization expense

 

 

350

 

Total

 

$

1,110

 

 

 


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 thereunto duly authorized.

 

 

 

Nuveen Global Cities REIT, Inc.

 

 

 

 

 

Date: July 20, 2018

 

By:

/s/ James E. Sinople

 

 

 

James E. Sinople

 

 

 

Chief Financial Officer and Treasurer