v3.10.0.1
DEBT (Tables)
 6 Months Ended
Jun. 30, 2018
Debt Disclosure [Abstract]  
Schedule of Debt [Table Text Block]
As of June 30, 2018 and December 31, 2017, the Company’s mortgage notes payable consisted of the following:
 
 
 
June 30, 2018
 
 
December 31, 2017
 
 
 
 
 
 
 
 
 
Collateral
 
Principal
‎
Amount
 
 
Deferred
‎
Loan
Costs,
‎
Net
 
 
Net
‎
Balance
 
 
Principal
‎
Amount
 
 
Deferred
‎
Loan
‎
Costs,
‎
Net
 
 
Net
‎
Balance
 
 
Contractual
‎
Interest
‎
Rate (1)
 
 
Effective
Interest
Rate (1)
 
 
Loan
‎
Maturity
Accredo/Walgreen properties
 
$
7,065,895
 
 
$
(107,771
)
 
$
6,958,124
 
 
$
7,133,966
 
 
$
(124,763
)
 
$
7,009,203
 
 
 
3.95
%
 
 
3.95
%
 
7/1/2021
Dana property
 
 
4,671,294
 
 
 
(113,139
)
 
 
4,558,155
 
 
 
4,709,889
 
 
 
(125,132
)
 
 
4,584,757
 
 
 
4.56
%
 
 
4.56
%
 
4/1/2023
Six Dollar General properties
 
 
3,916,681
 
 
 
(135,993
)
 
 
3,780,688
 
 
 
3,951,846
 
 
 
(153,290
)
 
 
3,798,556
 
 
 
4.69
%
 
 
4.69
%
 
4/1/2022
Wyndham property (2)
 
 
5,871,600
 
 
 
(104,096
)
 
 
5,767,504
 
 
 
5,920,800
 
 
 
(109,936
)
 
 
5,810,864
 
 
 
One-month


‎
LIBOR+2.05
%
 
 
4.34
%
 
6/5/2027
Williams Sonoma property (2)
 
 
4,658,400
 
 
 
(77,067
)
 
 
4,581,333
 
 
 
4,699,200
 
 
 
(85,227
)
 
 
4,613,973
 
 
 
One-month


‎
LIBOR+2.05
%
 
 
4.05
%
 
6/5/2022
Omnicare property
 
 
4,386,906
 
 
 
(159,155
)
 
 
4,227,751
 
 
 
4,423,574
 
 
 
(169,372
)
 
 
4,254,202
 
 
 
4.36
%
 
 
4.36
%
 
5/1/2026
Harley property
 
 
6,926,045
 
 
 
(185,658
)
 
 
6,740,387
 
 
 
6,983,418
 
 
 
(200,811
)
 
 
6,782,607
 
 
 
4.25
%
 
 
4.25
%
 
9/1/2024
Northrop Grumman property
 
 
5,877,911
 
 
 
(183,229
)
 
 
5,694,682
 
 
 
5,945,655
 
 
 
(217,584
)
 
 
5,728,071
 
 
 
4.40
%
 
 
4.40
%
 
3/2/2021
EMCOR property
 
 
2,935,147
 
 
 
(77,682
)
 
 
2,857,465
 
 
 
2,955,000
 
 
 
(83,743
)
 
 
2,871,257
 
 
 
4.35
%
 
 
4.35
%
 
12/1/2024
exp US Services property
 
 
3,475,886
 
 
 
(131,916
)
 
 
3,343,970
 
 
 
3,505,061
 
 
 
(140,382
)
 
 
3,364,679
 
 
 
(4
)
 
 
4.25
%
 
11/17/2024
Husqvarna property
 
 
6,380,000
 
 
 
(201,883
)
 
 
6,178,117
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
(5
)
 
 
4.60
%
 
2/20/2028
AvAir property (3)
 
 
14,575,000
 
 
 
(349,657
)
 
 
14,225,343
 
 
 
12,000,000
 
 
 
(330,866
)
 
 
11,669,134
 
 
 
(6
)
 
 
4.84
%
 
3/27/2028
3M property
 
 
8,360,000
 
 
 
(139,889
)
 
 
8,220,111
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
One-month


‎
LIBOR+2.25
%
 
 
5.09
%
 
3/29/2023
Cummins property
 
 
8,530,000
 
 
 
(162,175
)
 
 
8,367,825
 
 
 
—
 
 
 
—
 
 
 
—
 
 
 
One-month


‎
LIBOR+2.25
%
 
 
5.16
%
 
4/4/2023
 
 
$
87,630,765
 
 
$
(2,129,310
)
 
$
85,501,455
 
 
$
62,228,409
 
 
$
(1,741,106
)
 
$
60,487,303
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Contractual interest rate represents the interest rate in effect under the mortgage note payable as of June 30, 2018. Effective interest rate is calculated as the actual interest rate in effect as of June 30, 2018 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments (see Note 7).
 
(2)
The loans on each of the Williams Sonoma and Wyndham properties (collectively, the “Property”) located in Summerlin, Nevada were originated by Nevada State Bank (“Bank”). The loans are collateralized by a deed of trust and a security agreement with assignment of rents and fixture filing. In addition, the individual loans are subject to a cross collateralization and cross default agreement whereby any default under, or failure to comply with the terms of any one or both of the loans is an event of default under the terms of both loans. The value of the Property must be in an amount sufficient to maintain a loan to value ratio of no more than 60%. If the loan to value ratio is ever more than 60%, the borrower shall, upon the Bank’s written demand, reduce the principal balance of the loans so that the loan to value ratio is no more than 60%.
 
(3)
On March 27, 2018, the Company refinanced the mortgage loan payable as of December 31, 2017 with a new loan for $14,575,000 through a nonaffiliated lender.  The loan is secured by the AvAir property and it matures on March 27, 2028.
 
(4)
The initial contractual interest rate is 4.25% and starting November 18, 2022, the interest rate is T-Bill index plus 3.25%.
 
(5)
The initial contractual interest rate is 4.60% for the first five years and the greater of 4.60% or five-year Treasury Constant Maturity (“TCM”) plus 2.45% for the second five years.
 
(6)
The initial contractual interest rate for the note payable outstanding as of June 30, 2018 is 4.84% for the first five-years and the greater of 4.60% or five-year TCM plus 2.45% for the second five-years.
Mortgage Loan Payable [Table Text Block]
The following were the face value, carrying amount and fair value of the Company’s mortgage notes payable (Level 3 measurement): 
 
 
 
June 30, 2018
 
 
December 31, 2017
 
 
 
Face Value
 
 
Carrying
Value
 
 
Fair Value
 
 
Face value
 
 
Carrying
Value
 
 
Fair Value
 
Mortgage notes payable
 
$
87,630,765
 
 
$
85,501,455
 
 
$
86,757,903
 
 
$
62,228,409
 
 
$
60,487,303
 
 
$
62,363,284
 
Schedule of Maturities of Long-term Debt [Table Text Block]
The following summarizes the future principal repayment of the Company’s mortgage notes payable and Unsecured Credit Facility as of June 30, 2018:
 
 
 
Mortgage Note
Payable
 
 
Unsecured
Credit Facility (1)
 
 
Total
 
July through December 2018
 
$
453,113
 
 
$
—
 
 
$
453,113
 
2019
 
 
1,109,940
 
 
 
—
 
 
 
1,109,940
 
2020
 
 
1,365,278
 
 
 
—
 
 
 
1,365,278
 
2021
 
 
8,055,564
 
 
 
—
 
 
 
8,055,564
 
2022
 
 
14,432,812
 
 
 
—
 
 
 
14,432,812
 
2023
 
 
21,031,341
 
 
 
—
 
 
 
21,031,341
 
Thereafter
 
 
41,182,717
 
 
 
—
 
 
 
41,182,717
 
Total principal
 
$
87,630,765
 
 
$
—
 
 
$
87,630,765
 
Schedule Of Interest Expenses Reconciliation [Table Text Block]
The following is a reconciliation of the components of interest expense for the three and six months ended June 30, 2018 and 2017:
 
 
 
Three Months Ended
June 30,
 
 
Six Months Ended
June 30,
 
 
 
2018
 
 
2017
 
 
2018
 
 
2017
 
Mortgage notes payable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
$
1,006,398
 
 
$
184,179
 
 
$
1,829,658
 
 
$
265,837
 
Amortization of deferred financing costs
 
 
98,648
 
 
 
24,998
 
 
 
505,535
 
 
 
35,386
 
Unrealized (gain) loss on interest rate swaps (see Note 7)
 
 
6,235
 
 
 
104,633
 
 
 
(220,571
)
 
 
104,633
 
Unsecured credit facility
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
 
83,408
 
 
 
103,877
 
 
 
166,397
 
 
 
143,031
 
Amortization of deferred financing costs
 
 
8,571
 
 
 
481
 
 
 
12,857
 
 
 
1,118
 
Forfeited loan fee
 
 
—
 
 
 
20,000
 
 
 
—
 
 
 
20,000
 
Total interest expense
 
$
1,203,260
 
 
$
438,168
 
 
$
2,293,876
 
 
$
570,005