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v3.23.2

DEBT (Tables) | 6 Months Ended
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Jun. 30, 2023
Debt Disclosure [Abstract] |
Schedule of Long-Term Debt Instruments | The breakdown of debt as of June 30, 2023 and December 31, 2022 is as follows:
|  | June 30, 2023 |  | December 31, 2022
Mortgage notes payable, net |  | $ | 44,243,807 |  |  | $ | 44,435,556 |
Credit facility: |  |  |  |
Revolver |  | — |  |  | 3,000,000 |
Term loan, net |  | 248,263,340 |  |  | 148,018,164 |
Total |  | $ | 292,507,147 |  |  | $ | 195,453,720 |
Schedule of Debt | As of June 30, 2023 and December 31, 2022, the Company’s mortgage notes payable consisted of the following:
Collateral |  | 2023 Principal Amount |  | 2022 Principal Amount |  | Contractual Interest Rate (1) |  | Effective Interest Rate (2) |  | Loan Maturity
Costco property |  | $ | 18,850,000 |  |  | $ | 18,850,000 |  |  | 4.85% |  | 4.85% |  | 1/01/2030
Taylor Fresh Foods property |  | 12,350,000 |  |  | 12,350,000 |  |  | 3.85% |  | 3.85% |  | 11/01/2029
OES property |  | 13,161,357 |  |  | 13,315,009 |  |  | 4.50% |  | 4.50% |  | 3/09/2024
Total mortgage notes payable |  | 44,361,357 |  |  | 44,515,009 |  |  |  |  |  |  |
Plus unamortized mortgage premium, net (3) |  | 66,679 |  |  | 119,245 |  |  |  |  |  |  |
Less unamortized deferred financing costs |  | (184,229) |  |  | (198,698) |  |  |  |  |  |  |
Mortgage notes payable, net |  | $ | 44,243,807 |  |  | $ | 44,435,556 |  |  |  |  |  |  |
(1)Contractual interest rate represents the interest rate in effect under the mortgage note payable as of June 30, 2023 for the three mortgages that were not refinanced through a drawdown from the Credit Facility (defined and discussed below) with KeyBank National Association (“KeyBank”) in January 2022 given their prepayment penalties. (2)Effective interest rate is calculated as the actual interest rate in effect as of June 30, 2023 and December 31, 2022 consisting of the contractual interest rate. (3)Represents unamortized net mortgage premium acquired through the merger with Rich Uncles Real Estate Investment Trust I on December 31, 2019.
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following summarizes the face value, carrying amount and fair value of the Company’s mortgage notes payable (Level 3 measurement) as of June 30, 2023 and December 31, 2022:
|  | June 30, 2023 |  | December 31, 2022
|  | Face Value |  | Carrying Value |  | Fair Value |  | Face value |  | Carrying Value |  | Fair Value
Mortgage notes payable |  | $ | 44,361,357 |  |  | $ | 44,243,807 |  |  | $ | 41,039,641 |  |  | $ | 44,515,009 |  |  | $ | 44,435,556 |  |  | $ | 41,293,644 |
Schedule of Maturities of Long-term Debt | The following summarizes the future principal repayments of the Company’s mortgage notes payable and Credit Facility as of June 30, 2023:
|  | Mortgage Notes |  | Credit Facility |  |
|  | Payable |  | Revolver |  | Term Loan |  | Total
July through December 2023 |  | $ | 160,349 |  |  | $ | — |  |  | $ | — |  |  | $ | 160,349 |
2024 |  | 13,270,624 |  |  | — |  |  | — |  |  | 13,270,624 |
2025 |  | 543,886 |  |  | — |  |  | — |  |  | 543,886 |
2026 |  | 568,369 |  |  | — |  |  | — |  |  | 568,369 |
2027 |  | 593,972 |  |  | — |  |  | 250,000,000 |  |  | 250,593,972 |
Thereafter |  | 29,224,157 |  |  | — |  |  | — |  |  | 29,224,157 |
Total principal |  | 44,361,357 |  |  | — |  |  | 250,000,000 |  |  | 294,361,357 |
Plus unamortized mortgage premium, net |  | 66,679 |  |  | — |  |  | — |  |  | 66,679 |
Less deferred financing costs |  | (184,229) |  |  | — |  |  | (1,736,660) |  |  | (1,920,889) |
Net principal |  | $ | 44,243,807 |  |  | $ | — |  |  | $ | 248,263,340 |  |  | $ | 292,507,147 |
Schedule of Interest Expense | The following is a reconciliation of the components of interest expense, net of derivative settlements and unrealized gain on interest rate swaps for the three and six months ended June 30, 2023 and 2022:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Mortgage notes payable: |  |  |  |  |  |  |  |
Interest expense |  | $ | 471,092 |  |  | $ | 460,886 |  |  | $ | 943,032 |  |  | $ | 1,273,605 |
Amortization of deferred financing costs |  | 7,235 |  |  | 7,235 |  |  | 14,470 |  |  | 14,459 |
Credit facility: |  |  |  |  |  |  |  |
Interest expense |  | 3,997,972 |  |  | 1,098,435 |  |  | 6,386,908 |  |  | 1,666,432 |
Unused commitment fees |  | 103,403 |  |  | — |  |  | 289,639 |  |  | 22,233 |
Derivative cash settlements (1) |  | (1,401,716) |  |  | — |  |  | (2,475,801) |  |  | — |
Amortization of deferred financing costs |  | 214,261 |  |  | 120,830 |  |  | 428,522 |  |  | 221,520 |
Unrealized gain on interest rate swap valuation for first swap (2) |  | (1,639,768) |  |  | (589,997) |  |  | (495,750) |  |  | (589,997) |
Amortization of interest rate swap valuation (2) |  | (253,092) |  |  | — |  |  | (503,403) |  |  | — |
Unrealized gain on interest rate swap valuation for second swap (3) |  | (1,815,737) |  |  | — |  |  | (987,262) |  |  | — |
Other |  | 136,419 |  |  | 99,765 |  |  | 238,506 |  |  | 157,077 |
Interest expense, net |  | $ | (179,931) |  |  | $ | 1,197,154 |  |  | $ | 3,838,861 |  |  | $ | 2,765,329 |
(1) The Company entered into two swap transaction instruments for (i) its original $150,000,000 Credit Facility Term Loan (first swap) effective May 31, 2022 and (ii) its additional $100,000,000 Term Loan commitment (second swap) effective November 30, 2022, as described in detail in Note 7. (2) Due to the Company's $150,000,000 derivative instrument's failure to qualify as a cash flow hedge because it was deemed ineffective for the three and six months ended June 30, 2023 as described in Note 7, the $1,639,768 and $495,750 changes in the swap valuation for the three and six months ended June 30, 2023, respectively, are recognized as decreases in interest expense and the unrealized gain on interest rate swap derivative previously recorded in accumulated other comprehensive income and noncontrolling interest in operating partnership is being amortized on a straight-line basis as a reduction to interest expense through the maturity date of the loan agreement (see Note 7 for more details). (3) The Company's $100,000,000 derivative instrument was not designated as a cash flow hedge and, therefore, the $1,815,737 and $987,262 changes in the valuation of this swap for the three and six months ended June 30, 2023, respectively, are reflected as decreases in interest expense (see Note 7 for more details)

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