Steadfast Apartment REIT III

Prospectus and Risk Factors

Steadfast Apartment REIT III Prospectus

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An investment in Steadfast Apartment REIT III involves a high degree of risk. You should purchase shares only if you can afford a loss of some or all of your investment. You should carefully consider the information set forth in the “Risk Factors” section of the prospectus for a discussion of material risk factors relevant to an investment in our common stock, including, but not limited to, the following:

  • We have a limited prior operating history; there is no assurance that we will successfully achieve our investment objectives.
  • There is no public market for our shares and we are not obligated to effectuate a liquidity event by a certain date or at all. It will be difficult for you to sell your shares of common stock. If you are able to sell your shares, you will likely sell them at a substantial discount.
  • This is a “blind pool” offering. You will not have the opportunity to evaluate our investments before we make them.
  • You are limited in your ability to have all or any portion of your shares of our common stock repurchased under our share repurchase program, and, if you are able to have your shares repurchased, you may receive less than the price you paid for the shares and the then-current value of the shares.
  • The repurchase of shares pursuant to our share repurchase program will have a dilutive effect on our existing stockholders.
  • The amount of distributions we may make is uncertain. We have paid and may continue to pay distributions from sources other than our cash flow from operations. Distributions paid from sources other than our cash flow from operations represent a return of capital. We have not established a limit on the amount of proceeds from our public offering that we may use to fund distributions. This could result in fewer funds available for investments and your overall return may be reduced.
  • The offering price of our shares was not established based upon appraisals of assets we own or may own; therefore, the offering price may not accurately reflect the value of our assets when you invest.
  • We will depend upon our advisor to conduct our operations. Adverse changes in the financial health of our advisor could cause our operations to suffer.
  • All of our executive officers and some of our directors are also officers, managers, directors and/or holders of a controlling interest in our advisor, the dealer manager and other sponsor-affiliated entities. They will face conflicts of interest, including conflicts created by compensation arrangements, time constraints and competition for investments.
  • We pay substantial fees to our advisor and its affiliates, including the dealer manager. These fees were not negotiated at arm’s length and may be higher than fees payable to unaffiliated third parties.
  • We may be obligated to pay our advisor a subordinated distribution upon termination or non-renewal of the advisory agreement, with or without cause, which may be substantial and therefore may discourage us from terminating the advisor.
  • The success of our public offering depends on the ability of the dealer manager to successfully market our offering. If we raise substantially less than the maximum offering amount, we may not be able to invest in a diverse portfolio of assets and the value of your investment may vary more widely with the performance of specific assets.
  • We may incur debt exceeding 75% of the aggregate cost of our assets. High debt levels increase the risk of your investment. Loans we obtain may be collateralized by some or all of our investments, which will put those investments at risk of forfeiture if we are unable to pay our debts. Principal and interest payments on these loans reduce the amount of money that would otherwise be available for other purposes.
  • Failure to qualify as a REIT would adversely affect our operations and our ability to make distributions to our stockholders because we would be subject to U.S. federal income tax and applicable state and local income taxes at regular corporate rates and would be unable to deduct distributions made to our stockholders.