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Real Estate Acquisition
6 Months Ended
Jun. 30, 2011
Real Estate Acquisition  
Real Estate Acquisition

Note 6 - Real Estate Acquisition

 

On March 4, 2011, the Company acquired a retail property in Illinois for an all cash purchase price of $2,325,000. The Company incurred third party acquisition costs of $21,000 related to this acquisition.

 

As a result of this acquisition, the Company recorded intangible lease liabilities of $612,000 and intangible lease assets of $234,000, representing the value of the acquired below market lease and origination costs.  The Company assessed the fair value of the lease intangibles based on estimated cash flow projections that use appropriate discount rates and available market information (including an evaluation of lease renewal options). Such inputs are Level 3 in the fair value hierarchy. The fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant.  The value, as determined, is allocated to land, buildings and improvements based on management’s judgment.