v3.10.0.1
REAL ESTATE INVESTMENTS
 6 Months Ended
Jun. 30, 2018
Real Estate [Abstract]  
Real Estate Disclosure [Text Block]
NOTE 4. REAL ESTATE INVESTMENTS
 
As of June 30, 2018, the Company’s real estate portfolio consisted of 21 properties in 12 states consisting of: (i) eight retail, (ii) seven office, (iii) five industrial properties and (iv) one parcel of land, which previously served as an easement to one of our office properties. The following table provides summary information regarding the Company’s real estate as of June 30, 2018:
 
Property
 
Location
 
Acquisition
Date
 
Property
Type
 
Land,
Buildings and
Improvements
  
Tenant
Origination
and
Absorption
Costs
  
Accumulated
Depreciation
and
Amortization
  
Total
Investment
in Real
Estate
Property,
Net
 
Accredo Health
 
Orlando, FL
 
6/15/2016
 
Office
 
$
9,855,847
  
$
1,053,637
  
$
(1,016,759
)
 
$
9,892,725
 
Walgreens
 
Stockbridge, GA
 
6/21/2016
 
Retail
  
4,147,948
   
705,423
   
(669,582
)
  
4,183,789
 
Dollar General
 
Litchfield, ME
 
11/4/2016
 
Retail
  
1,281,812
   
116,302
   
(65,396
)
  
1,332,718
 
Dollar General
 
Wilton, ME
 
11/4/2016
 
Retail
  
1,543,776
   
140,653
   
(83,693
)
  
1,600,736
 
Dollar General
 
Thompsontown, PA
 
11/4/2016
 
Retail
  
1,199,860
   
106,730
   
(62,834
)
  
1,243,756
 
Dollar General
 
Mt. Gilead, OH
 
11/4/2016
 
Retail
  
1,174,188
   
111,847
   
(60,243
)
  
1,225,792
 
Dollar General
 
Lakeside, OH
 
11/4/2016
 
Retail
  
1,112,872
   
100,857
   
(61,828
)
  
1,151,901
 
Dollar General
 
Castalia, OH
 
11/4/2016
 
Retail
  
1,102,086
   
86,408
   
(60,073
)
  
1,128,421
 
Dana
 
Cedar Park, TX
 
12/27/2016
 
Industrial
  
8,392,906
   
1,210,874
   
(756,306
)
  
8,847,474
 
Northrop Grumman
 
Melbourne, FL
 
3/7/2017
 
Office
  
12,382,991
   
1,341,199
   
(1,011,412
)
  
12,712,778
 
exp US Services
 
Maitland, FL
 
3/27/2017
 
Office
  
5,920,121
   
388,248
   
(280,472
)
  
6,027,897
 
Harley
 
Bedford, TX
 
4/13/2017
 
Retail
  
13,178,288
   
—
   
(390,169
)
  
12,788,119
 
Wyndham
 
Summerlin, NV
 
6/22/2017
 
Office
  
9,447,270
   
669,232
   
(302,649
)
  
9,813,853
 
Williams Sonoma
 
Summerlin, NV
 
6/22/2017
 
Office
  
8,079,612
   
550,486
   
(278,048
)
  
8,352,050
 
Omnicare
 
Richmond, VA
 
7/20/2017
 
Industrial
  
7,262,746
   
281,442
   
(220,364
)
  
7,323,824
 
EMCOR
 
Cincinnati, OH
 
8/29/2017
 
Office
  
5,960,610
   
463,488
   
(155,797
)
  
6,268,301
 
Husqvarna
 
Charlotte, NC
 
11/30/2017
 
Industrial
  
11,840,201
   
1,013,948
   
(221,143
)
  
12,633,006
 
AvAir
 
Chandler, AZ
 
12/28/2017
 
Industrial
  
27,357,900
   
—
   
(375,955
)
  
26,981,945
 
3M
 
DeKalb, IL
 
3/29/2018
 
Industrial
  
14,762,819
   
2,356,361
   
(363,226
)
  
16,755,954
 
Cummins
 
Nashville, TN
 
4/4/2018
 
Office
  
14,465,490
   
1,536,998
   
(165,535
)
  
15,836,953
 
Northrop Grumman Parcel
 
Melbourne, FL
 
6/21/2018
 
Land
  
329,410
   
—
   
—
   
329,410
 
        
$
160,798,753
  
$
12,234,133
  
$
(6,601,484
)
 
$
166,431,402
 
 
Current Year Acquisitions
 
During the six months ended June 30, 2018, the Company acquired the following properties:
  
Property
 
Acquisition
Date
 
Land
  
Buildings and
Improvements
  
Tenant
Origination
and
Absorption
Costs
  
Above-
Market
Lease
  
Below-
Market
Lease
  
Total
 
3M
 
3/29/2018
 
$
758,780
  
$
14,004,039
  
$
2,356,361
  
$
—
  
$
(1,417,483
)
 
$
15,701,697
 
Cummins
 
4/4/2018
  
3,347,959
   
11,117,531
   
1,536,998
   
—
   
—
   
16,002,488
 
Northrop Grumman Parcel
 
6/21/2018
  
329,410
   
—
   
—
   
—
   
—
   
329,410
 
    
$
4,436,149
  
$
25,121,570
  
$
3,893,359
  
$
—
  
$
(1,417,483
)
 
$
32,033,595
 
 
Purchase price $32,033,595 
Acquisition fees to affiliates  (930,000)
Cash paid for acquisition of real estate investments $31,103,595 
 
The non-cancellable lease terms of the properties acquired during the six months ended June 30, 2018 are as follows:
 
Property
 
Lease Expiration
3M
 
7/31/2022
Cummins
 
2/28/2023
 
The purchase price allocations reflected in the condensed consolidated financial statements are based upon current estimates and assumptions that are subject to change which may impact the fair value of the assets and liabilities above (including real estate investments, other assets and accrued liabilities). The Company capitalized $501,697, $502,488 and $33,860 of acquisition fees and costs in conjunction with its acquisition of the 3M, Cummins and Northrop Grumman Parcel properties, respectively. During the three and six months ended June 30, 2018, the Company recognized $906,155 and $929,127, respectively, of total revenue related to these properties.
 
Operating Leases
 
As of June 30, 2018, the Company’s portfolio’s asset concentration (greater than 10% of total assets) was as follows:
 
Property and Location
 
Net Carrying
Value
  
Percentage of
Total Assets
 
AvAir, Chandler, AZ $26,981,945   14.2%
 
The Company’s real estate properties are primarily leased to tenants under triple-net leases for which terms and expirations vary. The Company monitors the credit of all tenants to stay abreast of any material changes in credit quality. The Company monitors tenant credit by (1) reviewing the credit ratings of tenants (or their parent companies or lease guarantors) that are rated by national recognized rating agencies; (2) reviewing financial statements and related metrics and information that are publicly available or that are required to be provided pursuant to the lease; (3) monitoring news reports and press releases regarding the tenants (or their parent companies or lease guarantors), and their underlying business and industry; and (4) monitoring the timeliness of rent collections.
 
As of June 30, 2018, the future minimum contractual rent payments due under the Company’s non-cancelable operating leases, excluding any renewal periods, are as follows:
 
July through December 2018 $6,582,221 
2019  13,381,683 
2020  13,524,743 
2021  12,339,938 
2022  10,963,883 
2023  8,643,467 
Thereafter  45,898,687 
  $111,334,622 
 
Revenue Concentration
 
The Company’s revenue concentration for the three and six months ended June 30, 2018 is as follows:
 
  
Three Months Ended
June 30, 2018
  
Six Months Ended
June 30, 2018
 
Property and Location
 
Revenue
  
Percentage of
Total Revenue
  
Revenue
  
Percentage of
Total Revenue
 
AvAir, Chandler, AZ $653,374   14.9% $1,289,146   16.4%
3M, DeKalb, IL $506,229   11.5% $—   — 
 
Intangibles
 
As of June 30, 2018, the Company’s lease intangibles were as follows:
 
  
Tenant Origination
and Absorption
Costs
  
Above-Market
Leases
  
Below-Market
Leases
 
Cost
 
$
12,234,133
  
$
783,115
  
$
(3,071,253
)
Accumulated amortization
  
(2,023,224
)
  
(150,345
)
  
238,676
 
Net amount
 
$
10,210,909
  
$
632,770
  
$
(2,832,577
)
 
The amortization of intangible assets over the next five years is expected to be as follows:
   
  
Tenant
Origination and
Absorption
Costs
  
Above-Market
Leases
  
Below-Market
Leases
 
July through December 2018
 
$
1,035,535
  
$
48,523
  
$
(237,196
)
2019
  
2,071,069
   
97,045
   
(474,391
)
2020
  
2,071,069
   
97,045
   
(474,391
)
2021
  
1,654,810
   
78,994
   
(474,391
)
2022
  
1,118,740
   
63,719
   
(306,829
)
2023
  
492,976
   
63,719
   
(78,369
)
Thereafter
  
1,766,710
   
183,725
   
(787,010
)
  
$
10,210,909
  
$
632,770
  
$
(2,832,577
)
             
Weighted-average remaining amortization period
  
7.2 years
   
7.6 years
   
9.9 years