CNSREIT-AR-2024 Final - Flipbook - Page 99
Consistent with our disclosure in the prospectus regarding our NAV calculation, our investments in real estate are
initially valued at cost. Set forth below are the weighted averages of the key assumptions in the discounted cash flow
methodology used in the December 31, 2024 valuation of our investments in real estate not valued at cost.
Property Type
Discount Rate
Exit Capitalization Rate
Community shopping center
9.07%
8.05%
Grocery-anchored shopping center
9.00%
7.75%
These assumptions are determined by our independent valuation advisor and reviewed by the Advisor. A change in
these assumptions would impact the calculation of the value of our investments in real estate. For example, assuming all
other factors remain unchanged, the changes listed below would result in the following effects on our investments in real
estate value:
Input
Discount Rate
Exit Capitalization Rate
Hypothetical Change
Community Shopping Center
Values
Grocery-Anchored Shopping
Center Values
0.25% decrease
1.69%
1.79%
0.25% increase
(1.81)%
(1.79)%
0.25% decrease
1.57%
1.53%
0.25% increase
(1.57)%
(1.79)%
The following table reconciles stockholders9 equity per our consolidated balance sheet to our NAV, and the
adjustments to reconcile GAAP stockholders9 equity to our NAV are described in the footnotes to the table ($ in
thousands):
Reconciliation of Stockholders9 Equity to NAV
Stockholders9 equity under GAAP
Adjustments (1):
Advanced organization and offering costs (2)
Unrealized real estate and borrowings appreciation (3)
Accumulated depreciation and amortization (4)
Straight-line rent adjustment (5)
NAV
December 31, 2024
$
123,858
$
8,413
4,544
4,615
(111)
141,319
__________
(1)
All adjustments are presented net of non-controlling interests.
(2)
The Advisor has agreed to advance all of our organization and offering expenses on our behalf (including legal,
accounting and other expenses attributable to our organization, but excluding upfront selling commissions, dealer
manager fees and stockholder servicing fees) through the earlier of (i) December 31, 2025 or (ii) the month that
our aggregate NAV is at least $1.0 billion. We will reimburse the Advisor for all such advanced expenses ratably
over the 60 months following such date. After the earlier of (i) December 31, 2025 or (ii) the month that our
aggregate NAV is at least $1.0 billion, we will reimburse the Advisor for any organization and offering expenses
that it incurs on our behalf as and when incurred. Under GAAP, organization costs are expensed as incurred and
offering costs are charged to equity as such amounts are incurred. For NAV, such costs will be recognized as a
reduction of NAV as they are reimbursed to the Advisor.
(3)
Our investments in real estate are presented at historical cost in our GAAP consolidated financial statements.
Additionally, our mortgage notes are presented at their carrying value in our GAAP consolidated financial
statements. As such, any changes in the fair market values of our investments in real estate and our mortgage
notes are not included in our GAAP results. For purposes of determining our NAV, our investments in real estate
and our mortgage note liabilities are recorded at fair value.
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