XML 33 R22.htm IDEA: XBRL DOCUMENT v3.21.2
REAL ESTATE INVESTMENTS, NET (Tables)
 9 Months Ended
Sep. 30, 2021
Real Estate [Abstract]  
Schedule of Real Estate Properties
The following table provides summary information regarding the Company’s operating properties as of September 30, 2021:
PropertyLocationAcquisition DateProperty TypeLand, Buildings and ImprovementsTenant Origination and Absorption CostsAccumulated Depreciation and AmortizationTotal Investment in Real Estate Property, Net
Accredo HealthOrlando, FL6/15/2016Office$9,855,847 $1,269,350 $(2,506,329)$8,618,868 
Dollar GeneralLitchfield, ME11/4/2016Retail1,281,812 116,302 (196,188)1,201,926 
Dollar GeneralWilton, ME11/4/2016Retail1,543,776 140,653 (251,079)1,433,350 
Dollar GeneralThompsontown, PA11/4/2016Retail1,199,860 106,730 (188,502)1,118,088 
Dollar GeneralMt. Gilead, OH11/4/2016Retail1,174,188 111,847 (180,730)1,105,305 
Dollar GeneralLakeside, OH11/4/2016Retail1,112,872 100,857 (185,485)1,028,244 
Dollar GeneralCastalia, OH11/4/2016Retail1,102,086 86,408 (180,218)1,008,276 
Northrop GrummanMelbourne, FL3/7/2017Office12,382,991 1,469,737 (3,466,555)10,386,173 
exp US ServicesMaitland, FL3/27/2017Office6,056,668 388,248 (1,001,253)5,443,663 
Harley (1)Bedford, TX4/13/2017Retail12,947,054 — (1,281,445)11,665,609 
WyndhamSummerlin, NV6/22/2017Office10,406,483 669,232 (1,436,091)9,639,624 
Williams SonomaSummerlin, NV6/22/2017Office8,079,612 550,486 (1,292,121)7,337,977 
OmnicareRichmond, VA7/20/2017Industrial7,275,115 281,442 (1,016,164)6,540,393 
EMCORCincinnati, OH8/29/2017Office5,960,610 463,488 (738,712)5,685,386 
HusqvarnaCharlotte, NC11/30/2017Industrial11,840,200 1,013,948 (1,381,471)11,472,677 
AvAirChandler, AZ12/28/2017Industrial27,357,899 — (2,631,689)24,726,210 
3MDeKalb, IL3/29/2018Industrial14,762,819 2,356,361 (4,410,594)12,708,586 
CumminsNashville, TN4/4/2018Office14,538,528 1,536,998 (2,759,017)13,316,509 
Northrop Grumman ParcelMelbourne, FL6/21/2018Land329,410 — — 329,410 
Texas HealthDallas, TX9/13/2018Office6,976,703 713,221 (904,326)6,785,598 
Bon SecoursRichmond, VA10/31/2018Office10,399,820 800,356 (1,318,163)9,882,013 
CostcoIssaquah, WA12/20/2018Office27,330,797 2,765,136 (3,631,336)26,464,597 
Taylor Fresh FoodsYuma, AZ10/24/2019Industrial34,194,369 2,894,017 (2,588,277)34,500,109 
Raising Cane'sSan Antonio, TX7/26/2021Retail3,430,224 213,997 (24,221)3,620,000 
LevinsSacramento, CA12/31/2019Industrial4,429,390 221,927 (386,065)4,265,252 
Dollar GeneralBakersfield, CA12/31/2019Retail4,899,714 261,630 (257,482)4,903,862 
LabcorpSan Carlos, CA12/31/2019Industrial9,672,174 408,225 (357,562)9,722,837 
GSA (MSHA)Vacaville, CA12/31/2019Office3,112,076 243,307 (242,401)3,112,982 
PreK EducationSan Antonio, TX12/31/2019Retail12,447,287 555,767 (1,006,332)11,996,722 
Dollar TreeMorrow, GA12/31/2019Retail1,320,367 73,298 (124,094)1,269,571 
Solar TurbinesSan Diego, CA12/31/2019Office7,133,241 284,026 (561,523)6,855,744 
Wood GroupSan Diego, CA12/31/2019Industrial9,869,520 539,633 (806,309)9,602,844 
ITW RippeyEl Dorado, CA12/31/2019Industrial7,071,143 304,387 (532,405)6,843,125 
Dollar GeneralBig Spring, TX12/31/2019Retail1,281,683 76,351 (89,195)1,268,839 
GapRocklin, CA12/31/2019Office8,407,236 360,377 (839,188)7,928,425 
L3HarrisSan Diego, CA12/31/2019Industrial11,631,857 454,035 (823,940)11,261,952 
Sutter HealthRancho Cordova, CA12/31/2019Office29,586,023 1,616,610 (1,890,868)29,311,765 
WalgreensSanta Maria, CA12/31/2019Retail5,223,442 335,945 (232,681)5,326,706 
$347,624,896 $23,784,332 $(41,720,011)$329,689,217 
(1)    Reclassified to real estate investment held for investment and use during the second quarter of 2021 from real estate held for sale beginning September 30, 2020 (see detailed discussion below).
The details of the Company's real estate impairment charges for the nine months ended September 30, 2020 were as follows:
PropertyLocationNine Months Ended
September 30, 2020
Rite AidLake Elsinore, CA$349,457 
DanaCedar Park, TX2,184,395 
24 Hour FitnessLas Vegas, NV5,664,517 
Dinan CarsMorgan Hill, CA1,308,156 
Total$9,506,525 
Acquisition of Raising Cane's
During the nine months ended September 30, 2021, the Company acquired the following real estate property:
PropertyAcquisition DateLandBuildings and
Improvements		Tenant
Origination
and Absorption
Costs		Total
Raising Cane's7/26/2021$1,902,069 $1,528,155 $213,997 $3,644,221 
During the three and nine months ended September 30, 2021, the Company recognized $47,004 of total revenue related to the above-acquired property.
The noncancellable lease term of the property acquired during the nine months ended September 30, 2021 is as follows:
PropertyLease Expiration
Raising Cane's2/20/2028
Dispositions and Real Estate Investments Held for Sale
The dispositions during the nine months ended September 30, 2021 and 2020 were as follows:
Nine Months Ended September 30, 2021
PropertyLocationDisposition DateProperty TypeRentable Square FeetContract Sale PriceGain on Sale
Chevron Gas StationRoseville, CA1/7/2021Retail3,300 $4,050,000 $228,769 
EcoThriftSacramento, CA1/29/2021Retail38,536 5,375,300 51,415 
Chevron Gas StationSan Jose, CA2/12/2021Retail1,060 4,288,888 9,458 
DanaCedar Park, TX7/7/2021Industrial45,465 10,000,000 4,127,638 
88,361 $23,714,188 4,417,280 
24 Hour Fitness Adjustment115,133 
Total$4,532,413 
On January 7, 2021, the Company completed the sale of its Roseville, California retail property, which was leased to the operator of a Chevron gas station, for $4,050,000, which generated net proceeds of $3,914,909 after payment of commissions and closing costs.
On January 29, 2021, the Company completed the sale of its Sacramento, California retail property, which was leased to EcoThrift, for $5,375,300, which generated net proceeds of $2,684,225 after repayment of the existing mortgage, commissions and closing costs.
On February 12, 2021, the Company completed the sale of its San Jose, California retail property, which was leased to the operator of a Chevron gas station, for $4,288,888, which generated net proceeds of $4,054,327 after payment of commissions and closing costs.
On July 7, 2021, the Company completed the sale of its Cedar Park, Texas industrial property which was leased to Dana Incorporated, but unoccupied, for $10,000,000, which generated net proceeds of $4,975,334 after repayment of the existing mortgage, commissions and closing costs. Upon the sale of the property, Dana Incorporated executed a promissory note payable to the Company for its obligation to continue to pay rent of $65,000 per month through July 2022 and pay its early termination fee of $1,381,767 no later than July 31, 2022. The unpaid amount of the Company's note receivable of $1,966,767 is presented as receivable from early termination of lease in the Company's unaudited condensed consolidated balance sheet as of September 30, 2021.
On September 24, 2021, the Company received a notice of refund amounting to $115,133 related to the sale of its Las Vegas, Nevada retail property on December 16, 2020, which was formerly leased to 24 Hour Fitness. The refund relates to a portion of a holdback from sales proceeds to cover expenses by the buyer to prepare the property for lease, including the payment of accrued interest, common area maintenance, taxes, insurance and other related expenses and building permits to begin construction of improvements on the property. The refund was recognized as an adjustment to the estimate of the amount which was expected to be received and was included in gain on sale of real estate investments in the accompanying unaudited condensed consolidated statements of operations.
Nine Months Ended September 30, 2020
PropertyLocationDisposition DateProperty TypeRentable Square FeetContract Sale Price(Loss) Gain on Sale
Rite AidLake Elsinore, CA8/3/2020Retail70,960 $7,250,000 $(422)
WalgreensStockbridge, GA8/27/2020Retail15,120 5,538,462 1,306,768 
Island PacificElk Grove, CA9/16/2020Retail27,296 3,155,000 387,296 
Total113,376 $15,943,462 $1,693,642 
The following table summarizes the major components of assets and liabilities related to real estate investments held for sale as of December 31, 2020 related to the Harley Davidson, EcoThrift and two Chevron properties:
December 31,
2020
Assets related to real estate investments held for sale:
Land, buildings and improvements$25,675,459 
Tenant origination and absorption costs554,788 
Accumulated depreciation and amortization(1,644,508)
Real estate investments held for sale, net24,585,739 
Other assets, net1,079,361 
Total assets related to real estate investments held for sale:$25,665,100 
Liabilities related to real estate investments held for sale:
Mortgage notes payable, net$9,088,438 
Other liabilities, net801,337 
Total liabilities related to real estate investments held for sale:$9,889,775 
The following table summarizes the major components of rental income, expenses and impairment related to the three real estate investments held for sale as of September 30, 2020 (the property previously leased to Dinan Cars located in Morgan Hill, California, the property leased to Harley Davidson located in Bedford, Texas and the property previously leased to 24 Hour Fitness located in Las Vegas, Nevada), which were included in continuing operations for the three and nine months ended September 30, 2020:
Three Months Ended September 30,Nine Months Ended September 30,
20202020
Total revenues$366,673 $2,004,279 
Expenses:
Interest expense169,871 554,009 
Depreciation and amortization145,695 554,036 
Other expenses143,173 414,115 
Impairment— 10,097,710 
Total expenses458,739 11,619,870 
Net loss$(92,066)$(9,615,591)
Rental Payments for Operating Leases
As of September 30, 2021, the future minimum contractual rent payments due to the Company under the Company’s non-cancellable operating leases, including lease amendments executed though the date of this report are as follows:
October through December 2021$6,687,205 
202226,946,631 
202325,024,065 
202424,593,849 
202521,424,993 
202614,552,340 
Thereafter60,307,335 
$179,536,418 
Intangible Assets
As of September 30, 2021, the Company’s lease intangible assets were as follows:
Tenant Origination and Absorption CostsAbove-Market Lease IntangiblesBelow-Market Lease Intangibles
Cost$23,784,332 $1,128,549 $(15,097,132)
Accumulated amortization(12,041,766)(405,074)3,631,118 
Net amount$11,742,566 $723,475 $(11,466,014)
The following table sets forth the Company's intangible assets, net as of September 30, 2021 and December 31, 2020 and their related useful lives:
Intangible AssetsUseful LifeSeptember 30,
2021		December 31,
2020
Investor list, net5.0 years$3,494,740 $3,494,740 
Web services technology, domains and licenses3.0 years3,661,852 3,466,102 
7,156,592 6,960,842 
Accumulated amortization(3,230,583)(1,833,054)
Net$3,926,009 $5,127,788 
Intangible Assets Amortization As of September 30, 2021, the amortization of intangible assets for the remaining three months ending December 31, 2021 and for each of the next five years and thereafter is expected to be as follows:
Tenant Origination and Absorption CostsAbove-Market Lease IntangiblesBelow-Market Lease Intangibles
October through December 2021$792,583 $32,455 $(363,041)
20222,715,030 129,823 (1,217,029)
20231,838,120 127,174 (921,169)
20241,726,446 122,543 (917,750)
20251,344,132 115,996 (917,750)
2026720,006 78,557 (912,347)
Thereafter2,606,249 116,927 (6,216,928)
$11,742,566 $723,475 $(11,466,014)
Weighted-average remaining amortization period7.1 years6.6 years11.8 years