On January 10, 2020, the Corporation announced that it was suspending its private offering of shares of its common stock until further notice. In addition, the Corporation announced that it would be terminating its Share Redemption Program and DRIP, each effective as of February 10, 2020. Through February 15, 2020, the most recent distribution date, the Company has paid $24,398 in distributions, including dividend reinvestments.

On February 7, 2020, the Board of Directors declared monthly distributions of $0.44 per share of the Company’s common stock and OP Units of record through April 29, 2020. The distributions are payable on the 15th of the following month to stockholders and unit holders of record on the last day of the month.

On February 7, 2020, the Company entered into a $60,000 term loan agreement (the “2022 Unsecured Term Loan”) with JP Morgan Chase Bank, N.A., as administrative agent. The 2022 Unsecured Term Loan was fully funded at closing and used to repay a portion of the debt assumed in the Internalization (see below). Borrowings under the 2022 Unsecured Term Loan are subject to interest-only payments at variable rates equal to LIBOR plus a margin based on the OP’s credit rating, between 0.85% and 1.65% per annum. Based on the OP’s current credit rating of Baa3, the applicable margin is 1.25%.

Through February 27, 2020 the Company sold eight properties with an aggregate carrying value of approximately $24,918 for total proceeds of $32,273. The Company incurred additional expenses related to the sales of approximately $1,370, resulting in a gain on sale of real estate of approximately $5,985.

Subsequent to December 31, 2019, the OP paid off borrowings on the Revolving Credit Facility in the aggregate amount of $11,000 and drew additional borrowings on the Revolving Credit Facility in aggregate amount of $117,000. The proceeds were used to partially fund the Internalization, repay a portion of the debt assumed in the Internalization, and complete a partial paydown on the Company’s 2020 Unsecured Term Loan. On February 13, 2020, the Company prepaid a mortgage in full in the amount of $541.

On February 7, 2020, the Company completed the Internalization of the external management functions that was previously performed for the Company by BRE. The Company’s management team and corporate staff, who were previously employed by BRE, became employed by an indirect subsidiary of the OP, and the Company is now internally managed. The Internalization was not considered a termination event under the Property Management Agreement or the Asset Management Agreement (see Note 3). The Property Management Agreement and Asset Management Agreement, however, were terminated upon closing of the Internalization, but no fees were paid under them as a result of that termination. The Internalization consisted of the acquisition of BRE through a series of mergers pursuant to the Merger Agreement.

The consideration paid pursuant to the Merger Agreement consists of (i) base consideration of approximately $209.5 million plus assumption of debt of approximately $90.5 million, paid at closing and (ii) additional consideration of up to $75 million payable in four tranches of $10 million, $15 million, $25 million, and $25 million if certain milestones related to either (a) the dollar volume-weighted average price of a share of the Company’s common stock (“VWAP per REIT Share”), following the completion of an IPO, or (b) the Company’s adjusted funds from operations (“AFFO”) per share, prior to the completion of an IPO, are achieved during specified periods of time following the closing of the Internalization (the “Earnout Periods”). The consideration will consist of a combination of cash, shares of the Company’s common stock, and OP Units, at the election of the owners of BRE.

The earnout tranches, applicable VWAP of a REIT Share and AFFO per share, and the applicable Earnout Periods are as follows:

	If the Company has completed an IPO		If the Company has not completed an IPO
Earnout Tranche^(a)	VWAP of a REIT Share	Applicable Earnout Period	AFFO per Share	Applicable Earnout Period
$10 million	$90.00	The two-year period beginning on the earlier of (i) the IPO closing date or (ii) December 31, 2020.	$5.85	The two-year period consisting of the calendar years ended December 31, 2020 and December 31, 2021.
$15 million	$95.00	The two-year period beginning on the earlier of (i) the IPO closing date or (ii) December 31, 2020.	$5.95	The two-year period consisting of the calendar years ended December 31, 2020 and December 31, 2021.
$25 million	$97.50	The four-year period beginning on the date that is exactly one year after the earnout period begins for the first and second tranches above.	$6.30	The four-year period consisting of the calendar years ended December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024.
$25 million	$100.00	The four-year period beginning on the date that is exactly one year after the earnout period begins for the first and second tranches above.	$6.70	The four-year period consisting of the calendar years ended December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024.

^(a)	Initial contractual value of applicable earnout tranche based on an $85.00 price per share/unit of Common Stock and OP Units. Does not take into account the actual per share price of Common Stock and OP Units at the time an applicable earnout tranche may be earned and paid.

Effective upon closing of the Internalization, the Company’s current executive officers, management team, and corporate staff became employees of the Company, and the four senior executives entered into employment agreements with the Company.

The Merger Agreement did not provide that the completion of an IPO is a condition to the closing of the Internalization. Under the terms of the Merger Agreement, however, if the Company does not complete an IPO by December 31, 2020, then the former owners of BRE who receive shares of the Company’s common stock and/or OP Units will be granted certain redemption rights as a means to provide additional liquidity in the absence of an IPO.

Prior to closing the Internalization, the Company repurchased all of the outstanding shares of Company common stock held by BRE in exchange for cash at a per share price equal to $85.00, the current Determined Share Value.

Upon closing of the Internalization, the Company entered into the Founding Owners’ Tax Protection Agreement, pursuant to which the OP agreed to indemnify the Founding Owners against the applicable income tax liabilities resulting from the sale, exchange, transfer or other disposal of the assets of BRE that the Company acquired in the Internalization, through February 7, 2030, or the Company’s failure to allocate specific types of the OP’s indebtedness to the Founding Owners. The maximum amount the Company may be liable for under the Founding Owners’ Tax Protection Agreements is $10 million.

In connection with the Internalization, the Company assumed the lease agreement relating to the Company’s principal executive office with CAHA, an affiliated third party, approximately 1.6% of which is indirectly owned by the Company’s Chairman and member of the Company’s Board of Directors. The lease is scheduled to expire on August 31, 2023, with two five-year renewal options. The annual rent for 2020 is approximately $547, with 2% annual increases thereafter.