Public Non-Traded REIT Balance Sheet/Cash Flow Questions

The SEC filings of a public, non-traded REIT work virtually identically to the equivalent filings of traded REITs. The shareholders' equity reporting of traded companies refers to the book value of contributed equity and not the current trading values (as you probably know). Like a traded REIT, a non-traded REIT has to register its securities with the SEC and generally engages a broker-dealer (typically one that has a door-to-door distribution network) to sell its shares with retail investors (typically very unsophisticated and gullible ones, hence the recent scrutiny of the industry). The non-traded REIT has the same obligations to make public filings given its retail investor base (as compared to a private equity fund that raises institutional capital from a limited number of qualified investors, making it exempt from public filing requirements). The only significant difference between traded and non-traded REIT shares is that non-traded shareholders typically have to look to the company to redeem their investment, and can't simply sell it on a stock market via a broker.

To answer each of your specific questions (and these answers would apply equally to traded or non-traded REITs):

• In the equity section, the "common stock" plus "capital in excess of par value" line items represent the total dollar-value of stock sold to investors, based on the amount the investors paid at the time the stock was initially sold by the company (again, it ignores the values at which those shares may trade today)

• The "accumulated deficit" section of the balance sheet represents the opposite of "retained earnings"--typically a company that generates positive net income might distribute some of that net income as a dividend, what's left over after that is "retained earnings" and it gets added to the equity capital account...in the case of this company, it has generated negative net income (or made distributions in excess of its income) in the aggregate throughout its life, so it has accumulated a deficit...this is not necessarily unusual for REITs since they can claim big non-cash depreciation expense that doesn't necessarily reflect economic devaluation of assets; it's especially true of non-traded REITs that often also make big dividend distributions that are not supported by cash flow

• Subscriptions and redemptions of common stock reflect the reality I explained above...non-traded REITs have door-to-door brokers that go around selling primary shares (new shares issued by the company), which share sales represent "subscriptions"...when an investor in those shares turns to the company to redeem (buy back) those shares, that is a redemption

• Non-controlling interests are created when the REIT invests in a joint venture where it owns the majority (but not all) of the joint venture; as a result, the REIT is required to "consolidate" the joint venture in its financial statements, meaning that it includes all the revenue and expense of the venture on its income statement as if it owned the whole thing. The entities that own the minority stakes in such joint ventures are the "non-controlling interests." So the contributions and distributions of equity by those minority stakes is reflected in the statement of shareholders equity, and the portion of net income/loss attributable to those minority stakes is also reflected on the income statement.