CNSREIT-AR-2024 Final - Flipbook - Page 28
Our NAV per share amounts may change materially if the appraised values of our properties materially change from
prior appraisals or the actual operating results for a particular month differ from what we originally budgeted for that
month.
Appraisals for a portion of our portfolio of properties are conducted at least once per month. Annual appraisals of our
properties are conducted by an independent third-party appraisal firm on a rolling basis, such that properties may be
appraised at different times but each property would be appraised by an independent third-party appraisal firm at least once
per year. In any month where an independent third-party appraisal firm does not prepare an appraisal for a property, our
independent valuation advisor prepares an appraisal for such property. When these appraisals are reflected in our NAV
calculations, there may be a material change in our NAV per share amounts for each class of our common stock from those
previously reported. These changes in a property9s value may be as a result of property-specific events or as a result of
more general changes to real estate values resulting from local, national or global economic changes. In addition, actual
operating results for a given month may differ from what we originally budgeted for that month, which may cause a
material increase or decrease in the NAV per share amounts. We will not retroactively adjust the NAV per share of each
class reported for the previous month. Therefore, because a new monthly appraisal may differ materially from the prior
appraisal or the actual results from operations may be better or worse than what we previously budgeted for a particular
month, the adjustment to reflect the new appraisal or actual operating results may cause the NAV per share for each class
of our common stock to increase or decrease, and such increase or decrease will occur in the month the adjustment is made.
It may be difficult to reflect, fully and accurately, material events that may impact our monthly NAV.
The Advisor9s determination of our monthly NAV per share is based in part upon twelve (12) monthly appraisals
prepared by the Independent Valuation Advisor and one annual appraisal completed by a third-party appraisal firm. As a
result, our published NAV per share in any given month may not fully reflect any or all changes in value that may have
occurred since the most recent appraisal or valuation. The Advisor reviews appraisal reports and monitors our real estate
and real estate debt, and is responsible for notifying the Independent Valuation Advisor of the occurrence of any propertyspecific or market-driven event it believes may cause a material valuation change in the real estate valuation, but it may be
difficult to reflect fully and accurately rapidly changing market conditions or material events that may impact the value of
our real estate and real estate debt or liabilities between valuations, or to obtain complete information regarding any such
events in a timely manner. For example, an unexpected termination or renewal of a material lease, a material increase or
decrease in vacancies or an unanticipated structural or environmental event at a property may cause the value of a property
to change materially, yet obtaining sufficient relevant information after the occurrence has come to light and analyzing
fully the financial impact of such an event may be difficult to do and may require some time. As a result, the NAV per
share may not reflect a material event until such time as sufficient information is available and analyzed, and the financial
impact is fully evaluated, such that our NAV may be appropriately adjusted in accordance with our valuation guidelines.
Depending on the circumstance, the resulting potential disparity in our NAV may be in favor or to the detriment of either
stockholders whose shares are repurchased, or stockholders who buy new shares, or existing stockholders.
NAV calculations are not governed by governmental or independent securities, financial or accounting rules or
standards.
The methods used to calculate our NAV, including the components used in calculating our NAV, are not prescribed by
rules of the SEC or any other regulatory agency. Further, there are no accounting rules or standards that prescribe which
components should be used in calculating NAV, and our NAV is not audited by our independent registered public
accounting firm. We calculate and publish NAV solely for purposes of establishing the price at which we sell and
repurchase shares of our common stock and to calculate certain fees and distributions payable to the Advisor, the Special
Limited Partner and the Dealer Manager, and you should not view our NAV as a measure of our historical or future
financial condition or performance. The components and methodology used in calculating our NAV may differ from those
used by other companies now or in the future.
In addition, calculations of our NAV, to the extent that they incorporate valuations of our assets and liabilities, are not
prepared in accordance with GAAP. These valuations may differ from liquidation values that could be realized if we were
forced to sell assets.
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