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Risk Factors

Understanding the Investment

Investing in our common stock involves a high degree of risk. You should purchase these securities only if you can afford a complete loss of your investment. See "Risk Factors" beginning on page 22 of our private placement memorandum for a discussion of certain factors that should be carefully considered by prospective investors before making an investment in the shares of our common stock.  These risks include but are not limited to the following:
  • No public market currently exists for our shares of common stock, and our charter does not require our directors to create any other liquidity event for our stockholders by a specified date. In addition, our share redemption program includes numerous restrictions that limit your ability to sell your shares to us. If you are able to sell your shares before a liquidity event or a listing, you would likely have to sell them at a substantial discount from their public offering price.
  • We set the primary offering prices of our Class T and Class I shares arbitrarily. These prices may not be indicative of the prices at which our shares would trade if they were listed on an exchange or actively traded, and the prices bear no relationship to the book or net value of our assets or to our expected operating income.
  • We are dependent on our advisor to select investments and conduct our operations. Loss of our advisor or the loss of key employees by our sponsors could cause a substantial disruption to our business.
  • Our executive officers and some of our directors are also officers, directors, managers or key professionals of our sponsors. As a result, they will face conflicts of interest, including significant conflicts created by our advisor’s compensation arrangements with us and other programs sponsored by our sponsors and conflicts in allocating time among us and these other programs.
  • We pay substantial fees to and expenses of our advisor, its affiliates and participating broker-dealers, which payments increase the risk that you will not earn a profit on your investment.
  • Our advisor and its affiliates, receive fees in connection with transactions involving the acquisition and management of our investments. These fees are not based on the quality of the investment or the quality of the services rendered to us.
  • There is no limit on the amount we can borrow to acquire a single real estate investment, but pursuant to our charter, we may not leverage our assets with debt financing such that our borrowings would be in excess of 300% of our net assets unless a majority of the members of our Conflicts Committee finds substantial justification for borrowing a greater amount. High debt levels could limit the amount of cash we have available.
  • If we are unable to raise substantial funds during our offering stage, we may not be able to acquire a diverse portfolio of real estate investments, which may cause the value of an investment in us to vary more widely with the performance of specific assets and cause our general and administrative expenses to constitute a greater percentage of our revenue. Raising fewer proceeds during our offering stage, therefore, could increase the risk that our stockholders will lose money in their investment.
  • Our charter permits us to pay distributions from any source without limitation, 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 we can fund from sources other than from cash flows from operations.
  • We may experience adverse business developments or conditions similar to those affecting certain programs sponsored by our sponsors, which could limit our ability to make distributions and could decrease the value of your investment.
  • Disruptions in the financial markets and poor economic conditions could adversely affect our ability to implement our business strategy and generate returns to you.
  • Our failure to qualify as a REIT for federal income tax purposes would reduce the amount of income we have available for distribution and limit our ability to make distributions to our stockholders.
  • We may change our targeted investments without stockholder consent, which could adversely affect the value of our common stock and our ability to make distributions to you.
  • Because the dealer manager is one of our affiliates, you will not have the benefit of an independent review of us or this prospectus customarily undertaken in underwritten offerings; the absence of an independent due diligence review increases the risks and uncertainty you face as a stockholder.