Risk Factors

  • No public market currently exists for our shares of common stock, and we have no current plans to list our shares on an exchange.
  • We set the offering price arbitrarily. This price is unrelated to the book or net value of our assets or to our expected operating income.
  • We have a limited operating history, and as of December 31, 2012, our total assets were $180.5 million and consisted primarily of $142.3 million of investments, $29.9 million of cash and $3.0 million of deferred offering costs. We have not identified all of the investments to acquire with the proceeds of this offering; consequently, you will not have the opportunity to evaluate all of our investments before we make them.
  • We are dependent on our advisor and its affiliates to select investments and conduct our operations and this offering. Our advisor has a limited operating history and no experience operating a public company.
  • We pay substantial fees and expenses to our advisor, its affiliates and broker-dealers, whose payments increase the risk that you will not earn a profit on your investment.
  • Our executive officers and some of our directors face conflicts of interest.
  • We may lack diversification if we raise substantially less than the maximum offering.
  • Property values may fall due to environmental, economic or other reasons. A change in interest rates can negatively impact our performance.
  • There are restrictions on the ownership and transferability of our shares of common stock. See “Description of Shares – Restriction on Ownership of Shares” found in the prospectus.
  • Our charter permits us to pay distributions from any source, including from offering proceeds, borrowings, sales of assets or waivers or deferrals of fees otherwise owed to our advisor. To the extent these distributions exceed our net income or net capital gain, a greater proportion of your distributions will generally represent a return of capital as opposed to current income or gain, as applicable. Our organizational documents do not limit the amount of distributions that we can fund from sources other than from cash flows from operations.
  • We may change our targeted investments without stockholder consent.
  • Some of the other programs sponsored by our sponsor, Resource Real Estate, Inc. (“Resource Real Estate”), have experienced adverse business developments or conditions.
  • Assuming all else is equal, REITs investing in "opportunistic" commercial real estate generally have a higher level of risk associated with them compared to those investing in core and value-add properties. This is based on the premise that "opportunistic" investing is designed to generate returns through capital appreciation rather than income.
  • There are inherent risks associated with investing in real estate including but not limited to interest rate fluctuations, market conditions, property values, natural hazards and occupancy rates. Disruptions in the financial markets and sluggish economic conditions could adversely impact our ability to implement our business strategy and generate returns. Additionally, if we are unable to find suitable investments, we may not be able to achieve our investment objectives or pay distributions.