CNSREIT-AR-2024 Final - Flipbook - Page 25
The amount and source of distributions we may make to our stockholders is uncertain, and we may be unable to
generate sufficient cash flows from our operations to make distributions to our stockholders at any time in the future.
We have not established a minimum distribution payment level, and our ability to make distributions to our
stockholders may be adversely affected by a number of factors, including the risk factors described in this Annual Report
on Form 10-K. We have a limited operating history and may not generate sufficient income to make distributions to our
stockholders. Our Board (or a committee thereof) will make determinations regarding distributions based upon, among
other factors, our financial performance, debt service obligations, debt covenants, REIT qualification and tax requirements
and capital expenditure requirements. Among the factors that could impair our ability to make distributions to our
stockholders are:
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our inability to invest the proceeds from sales of our shares on a timely basis in income-producing properties;
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our inability to realize attractive risk-adjusted returns on our investments;
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the limited size of our portfolio in the early stages of our development;
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high levels of expenses or reduced revenues that reduce our cash flow or non-cash earnings; and
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defaults in our investment portfolio or decreases in the value of our investments.
As a result, we may not be able to make distributions to our stockholders at any time in the future, and the level of any
distributions we do make to our stockholders may not increase or even be maintained over time, any of which could
materially and adversely affect the value of your investment.
We face risks associated with the deployment of our capital.
In light of the nature of our continuous public offering as well as ongoing and periodic private offerings and the need
to be able to deploy potentially large amounts of capital quickly to capitalize on potential investment opportunities, if we
have difficulty identifying and purchasing suitable properties on attractive terms, there could be a delay between the time
we receive net proceeds from the sale of shares of our common stock in the Offering or any private offering and the time
we invest the net proceeds. We may also from time to time hold cash pending deployment into investments or have less
than our targeted leverage, which cash or shortfall in targeted leverage may at times be significant, particularly at times
when we are receiving high amounts of offering proceeds or times when there are few attractive investment opportunities.
We may hold such cash in money market accounts or other similar temporary investments, each of which are subject to the
management fees payable to the Advisor.
If we are unable to find suitable investments such cash may be maintained for longer periods, which would be dilutive
to overall investment returns. This could cause a substantial delay in the time it takes for your investment to realize its full
potential return and could adversely affect our ability to pay regular distributions of cash flow from operations to you. It is
not anticipated that the temporary investment of such cash into money market accounts or other similar temporary
investments pending deployment into investments will generate significant interest, and investors should understand that
such low interest payments on the temporarily invested cash may adversely affect overall returns. If we fail to timely invest
the net proceeds of sales of our common stock or do not deploy sufficient capital to meet our targeted leverage, our results
of operations and financial condition may be adversely affected.
We may pay distributions from sources other than our cash flow from operations, including the sale of our assets,
borrowings or offering proceeds, and we have no limits on the amounts we may pay from such sources.
We may not generate sufficient cash flow from operations to fully fund distributions to stockholders, particularly
during the early stages of our operations. Therefore, we may fund distributions to our stockholders from sources other than
cash flow from operations, including the sale of or repayment under our assets, borrowings, cash resulting from the
Advisor9s deferral or waiver of its management fees and other expense reimbursements otherwise payable to the Advisor or
its affiliates, cash resulting from the Advisor or its affiliates paying certain of our expenses (which may be reimbursed to
the Advisor and may not be paid in the future) or proceeds from offerings of our common stock. Funding distributions from
such sources and the ultimate repayment of any liabilities incurred could result in us having less funds available to acquire
properties or other real estate-related investments, and could adversely impact our ability to pay distributions in future
periods and decrease our NAV and impact the value of your investment.
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