NOTE 3. REAL PROPERTY

As of September 30, 2017, the Company’s real estate portfolio consisted of sixteen properties in eight states consisting of eight retail, six office and two industrial properties. The following table provides summary information regarding the Company’s real estate as of September 30, 2017:

						Tenant		Accumulated		Total
				Land,		Origination		Depreciation		Investsment in
		Acquisition		Buildings and		and Absorption		and		Real Estate
Property	Location	Date	Property Type	Improvements		Costs		Amortization		Property, Net
Accredo	Orlando, FL	6/15/2016	Office	$	9,850,052	$	1,053,637	$	(637,856)	$	10,265,833
Walgreens	Stockbridge, GA	6/21/2016	Retail		4,147,948		705,423		(423,613)		4,429,758
Dollar General	Litchfield, ME	11/4/2016	Retail		1,281,812		116,302		(35,213)		1,362,901
Dollar General	Wilton, ME	11/4/2016	Retail		1,543,776		140,653		(45,065)		1,639,364
Dollar General	Thompsontown, PA	11/4/2016	Retail		1,199,860		106,730		(33,834)		1,272,756
Dollar General	Mt. Gilead, OH	11/4/2016	Retail		1,174,188		111,847		(32,439)		1,253,596
Dollar General	Lakeside, OH	11/4/2016	Retail		1,112,872		100,857		(33,292)		1,180,437
Dollar General	Castalia, OH	11/4/2016	Retail		1,102,086		86,408		(32,347)		1,156,147
Dana	Cedar Park, TX	12/27/2016	Industrial		8,392,906		1,210,874		(388,373)		9,215,407
Northrop Grumman	Melbourne, FL	3/7/2017	Office		12,382,991		1,341,199		(424,141)		13,300,049
exp US Services	Maitland, FL	3/27/2017	Office		5,920,121		388,248		(117,617)		6,190,752
Harley	Bedford, TX	4/13/2017	Retail		13,178,286		-		(140,939)		13,037,347
Wyndham	Summerlin, NV	6/22/2017	Office		9,447,270		669,232		(84,742)		10,031,760
Williams Sonoma	Summerlin, NV	6/22/2017	Office		7,517,050		550,486		(71,732)		7,995,804
Omnicare	Richmond, VA	7/20/2017	Industrial		7,042,928		281,442		(47,905)		7,276,465
EMCOR	Cincinnati, OH	8/29/2017	Office		5,960,612		463,489		(22,047)		6,402,054
				$	91,254,758	$	7,326,827	$	(2,571,155)	$	96,010,430

Current Acquisitions

During the nine months ended September 30, 2017, the Company acquired the following properties, not including the Company’s investment in a tenant-in-common (“TIC”) ownership interest in the Fujifilm Santa Clara, CA property (“Fujifilm”) see Note 4:

						Tenant
						Origination
				Buildings and		and Absorption		Above-Market		Below-Market
Property	Acquisition Date	Land		Improvements		Costs		Lease		Lease		Total
Northrop Grumman	3/7/2017	$	1,191,024	$	11,191,967	$	1,341,199	$	-	$	-	$	13,724,190
exp US Services	3/27/2017		785,801		5,134,320		388,248		616,486		-		6,924,855
Harley	4/13/2017		1,145,196		12,033,090		-		-		-		13,178,286
Wyndham	6/22/2017		4,144,069		5,303,201		669,232		-		-		10,116,502
Williams Sonoma	6/22/2017		3,546,744		3,478,337		550,486		-		(364,555)		7,211,012
Omnicare	7/20/2017		800,772		6,242,156		281,442		-		-		7,324,370
EMCOR	8/29/2017		427,591		5,533,021		463,489		-		(285,563)		6,138,538
		$	12,041,197	$	48,916,092	$	3,694,096	$	616,486	$	(650,118)	$	64,617,753

Purchase price	$	64,617,753
Purchase deposits applied		(500,000)
Acquisition fees to affiliates		(1,872,056)
Cash paid for acquisition of real estate investments	$	62,245,697

The purchase price allocations reflected in the accompanying unaudited Condensed Consolidated Financial Statements is based upon estimates and assumptions that are subject to change that may impact the fair value of the assets and liabilities above (including real estate investments, other assets and accrued liabilities). The noncancellable lease terms of the properties acquired during the nine months ended September 30, 2017 are as follows:

Property		Lease Expiration
Northrop Grumman		5/31/2021
exp US Services		11/30/2026
Harley		4/12/2042
Wyndham		2/28/2025
Williams Sonoma		10/31/2022
Omnicare		5/31/2031
EMCOR		2/28/2037

The Company recorded these acquisitions as asset acquisitions and capitalized $513,398 and $2,236,649 of acquisition fees and costs for the three and nine months ended September 30, 2017, respectively. During the three and nine months ended September 30, 2017, the Company recognized $1,569,346 and $2,635,398, respectively, of total revenue related to these properties.

Operating Leases

As of September 30, 2017, our portfolio’s asset concentration (greater than 10% of total assets) was as follows:

	Net Carrying		Percentage of
Property and Location	Value		Total Assets
Northrop Grumman, FL	$	13,300,049		10.79	%
Harley, TX	$	13,037,347		10.58	%

At September 30, 2017 and December 31, 2016, tenant receivables included $650,723 and $29,975, respectively, of straight-line rent.

As of September 30, 2017, the future minimum contractual rent payments due under the Company’s operating leases are as follows:

October 1, 2017 through December 31, 2017	$	1,754,045
2018		7,748,156
2019		7,921,668
2020		7,952,063
2021		6,644,366
2022		5,658,981
Thereafter		24,676,720
	$	62,355,999

Revenue Concentration

For the nine months ended September 30, 2017, our portfolio’s revenue concentration (greater than 10% total revenue) was as follows:

			Percentage of
Property and Location	Revenue		Total Revenue
Accredo, FL	$	820,420		16.72	%
Northrop Grumman, FL	$	793,245		16.17	%
Harley, TX	$	646,331		13.17	%
Dana, TX	$	686,399		13.99	%

As of September 30, 2017, our portfolio’s tenant concentration (greater than 10% of annualized base rent) was as follows:

	Effective		Percentage of
	Annualized		Annualized
Property and Location	Base Rent*		Base Rent
Accredo, FL	$	899,010		11.95	%
Northrop Grumman, FL	$	1,162,274		15.45	%
Harley, TX	$	900,000		11.96	%
Wyndham, NV	$	798,827		10.62	%

*Effective Annualized Base Rent is calculated based on the monthly base rent at September 30, 2017 for twelve months.

As of September 30, 2017, no other tenant accounted for more than 10% of annualized base rent.

Intangibles

As of September 30, 2017, the Company’s intangibles were as follows:

	Tenant
	Origination
	and
	Absorption		Above-Market		Below-Market
	Costs		Leases		Leases
Cost	$	7,326,827	$	783,114	$	(801,727)
Accumulated amortization		(895,211)		(77,560)		38,055
Net amount	$	6,431,616	$	705,554	$	(763,672)

Amortization of intangible assets over the next five years is expected to be as follows:

	Tenant
	Origination
	and
	Absorption		Above-Market		Below-Market
	Costs		Leases		Leases
October 1, 2017 through December 31, 2017	$	290,635	$	24,261	$	(26,047)
2018		1,162,541		97,045		(104,190)
2019		1,162,541		97,045		(104,190)
2020		1,162,541		97,045		(104,190)
2021		746,281		78,994		(104,190)
2022		472,808		63,719		(84,499)
Thereafter		1,434,269		247,445		(236,366)
	$	6,431,616	$	705,554	$	(763,672)
Weighted-Average Remaining Amortization Period		7.41 years		8.21 years		10.70 years