CNSREIT-AR-2024 Final - Flipbook - Page 26
We may be required to continue to fund our regular distributions from a combination of some of these sources if our
investments fail to perform, if expenses are greater than our revenues or due to numerous other factors. We have not
established a limit on the amount of our distributions that may be paid from any of these sources. The extent to which we
pay distributions from sources other than cash flow from operations will depend on various factors, including (i) the level
of participation in our distribution reinvestment plan, (ii) the extent to which the Advisor elects to receive its management
fee in shares or in units of the Operating Partnership, (iii) to the extent to which the Special Limited Partner may elect to
receive distributions on its performance participation interest in units of the Operating Partnership, (iv) how quickly we
deploy capital raised in offerings and (v) the performance of our investments.
Funding distributions from the sale of additional securities will dilute your interest in us on a percentage basis and may
impact the value of your investment especially if we sell these securities at prices less than the price you paid for your
shares. To the extent we borrow funds to pay distributions, we would incur borrowing costs and these borrowings would
require a future repayment. If we defer operating expenses or pay expenses (including the fees of the Advisor or
distributions to the Special Limited Partner) with shares of our common stock or Operating Partnership units in order to
preserve cash flow for the payment of distributions, the ultimate repayment of these deferred expenses could adversely
affect our operations and reduce the future return on your investment. We may repurchase shares or redeem Operating
Partnership units from the Advisor or the Special Limited Partner shortly after issuing such units or shares as
compensation. The payment of expenses in shares of our common stock or with Operating Partnership units will dilute
your ownership interest in our portfolio of assets. There is no guarantee any of our operating expenses will be deferred and
the Advisor and Special Limited Partner are under no obligation to receive future fees or distributions in shares of our
common stock or Operating Partnership units and may elect to receive such amounts in cash.
Payments to the Advisor or the Special Limited Partner in the form of common stock or Operating Partnership units
they elect to receive in lieu of fees or distributions will dilute future cash available for distribution to our stockholders.
The Advisor or the Special Limited Partner may choose to receive our common stock or Operating Partnership units in
lieu of certain fees or distributions. The holders of all Operating Partnership units are entitled to receive cash from
operations pro rata with the distributions being paid to us and such distributions to the holder of the Operating Partnership
units will reduce the cash available for distribution to us and to our stockholders.
Furthermore, under certain circumstances the Operating Partnership units held by the Advisor or the Special Limited
Partner are required to be repurchased, in cash at the holder9s election, and there may not be sufficient cash to make such a
repurchase payment; therefore, we may need to use cash from operations, borrowings, offering proceeds or other sources to
make the payment, which will reduce cash available for distribution to you or for investment in our operations.
Repurchases of our shares or Operating Partnership units from the Advisor paid to the Advisor as a management fee are not
subject to the monthly and quarterly volume limitations or the Early Repurchase Deduction. Repurchases of our shares or
Operating Partnership units from the Special Limited Partner distributed to the Special Limited Partner with respect to its
performance participation interest are not subject to the Early Repurchase Deduction, but such repurchases are subject to
the monthly and quarterly volume limitations. We will only process repurchases of common stock held by the Special
Limited Partner after all other stockholder repurchase requests have been processed.
Purchases and repurchases of shares of our common stock are not made based on the current NAV per share of our
common stock.
Generally, our offering price per share and the price at which we make purchases and repurchases of our shares will
equal the NAV per share of the applicable class as of the last calendar day of the prior month, plus, in the case of our
offering price, applicable upfront selling commissions and dealer manager fees. The NAV per share, if calculated as of the
date on which you make your subscription request or repurchase request, may be significantly different than the transaction
price you pay or the repurchase price you receive. Certain of our investments or liabilities are subject to high levels of
volatility from time to time and could change in value significantly between the end of the prior month as of which our
NAV is determined and the date that you acquire or we repurchase our shares; however, the prior month9s NAV per share
will generally continue to be used as the transaction price per share and repurchase price per share. In exceptional
circumstances, we may in our sole discretion, but are not obligated to, offer and repurchase shares at a different price that
we believe reflects the NAV per share of such stock more appropriately than the prior month9s NAV per share, including
by updating a previously disclosed transaction price, in cases where we believe there has been a material change (positive
or negative) to our NAV per share since the end of the prior month and we believe an updated price is appropriate. In such
exceptional cases, the transaction price and the repurchase price will not equal our NAV per share as of any time.
9
