Note 3 – Real Estate Investments

Real Estate Portfolio

At June 30, 2015 and December 31, 2014, the Company’s gross investment in real estate assets, including properties under development, totaled $688,542,000 and $589,147,000, respectively. Real estate investments consisted of the following as of June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014

Number of Properties		250		209
Gross Leasable Area		4,950,000		4,315,000

Land	$	209,267,989	$	195,091,303
Buildings		478,806,718		393,826,467
Property under Development		467,302		229,242
Gross Real Estate Investments	$	688,542,009	$	589,147,012
Less Accumulated Depreciation	$	(60,455,765)	$	(59,089,851)
Net Real Estate Investments	$	628,086,244	$	530,057,161

Lease Intangibles

The following table details lease intangibles, net of accumulated amortization, as of June 30, 2015 and December 31, 2014:

	June 30, 2015		December 31, 2014
Intangible Lease Asset - In-Place Leases	$	42,748,526	$	36,680,630
Less: Accumulated Amortization		(5,393,077)		(3,897,008)
Intangible Lease Asset - Above-Market Leases		46,973,605		31,642,267
Less: Accumulated Amortization		(5,483,854)		(4,111,435)
Intangible Lease Liability - Below-Market Leases		(20,384,955)		(15,124,210)
Less: Accumulated Amortization		3,055,567		2,289,358
Lease Intangible Asset, net	$	61,515,812	$	47,479,602

Investments

During the three months ended June 30, 2015, the Company purchased 19 retail net lease assets for approximately $63,635,000, including acquisition and closing costs. These properties are located in 11 states and are 100% leased to 14 different tenants operating in 11 diverse retail sectors for a weighted average lease term of approximately 12.5 years. The underwritten weighted average capitalization rate on the Company’s second quarter 2015 acquisitions was approximately 7.9%.

During the six months ended June 30, 2015, the Company purchased 44 retail net lease assets for approximately $124,354,000, including acquisition and closing costs. These properties are located in 18 states and are 100% leased to 27 different tenants operating in 17 diverse retail sectors for a weighted average lease term of approximately 12.7 years. The underwritten weighted average capitalization rate on the Company’s acquisitions was approximately 8.0%.

The aggregate 2015 acquisitions for the six months ended June 30, 2015 were allocated $16,060,000 to land, $92,072,000 to buildings and improvements, and $16,223,000 to lease intangibles. The acquisitions were all cash purchases and there was no contingent consideration associated with these acquisitions.

None of the Company’s acquisitions during the first six months of 2015 caused any new or existing tenant to comprise 10% or more of its total assets or generate 10% or more of its total annualized base rent at June 30, 2015.

The Company calculates the underwritten weighted average capitalization rate on its acquisitions by dividing annual expected net operating income derived from the properties by the total investment in the properties. Annual expected net operating income is defined as the straight-line rent for the base term of the lease less property level expenses (if any) that are not recoverable from the tenant.

Dispositions

During the three months ended June 30, 2015, the Company sold three assets for gross proceeds of $8,150,000 including (i) Marshall Plaza, a Kmart-anchored shopping center in Marshall, Michigan; (ii) a former Border’s store in Lawrence, Kansas, which was the Company’s only vacant retail net lease property; and (iii) an outlot to the Company’s Meijer’s store in Plainfield, Indiana. The Company recorded a net gain of approximately $3,456,000 on the sales.

During the six months ended June 30, 2015, the Company sold four assets for gross proceeds of $9,188,000 including the three assets described above, as well as a Sonic restaurant in Waynesboro, Virginia. The Company recorded a net gain of approximately $3,535,000 on the sales.