XML 35 R25.htm IDEA: XBRL DOCUMENT v3.23.2
DEBT (Tables)
 6 Months Ended
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, net248,263,340 148,018,164 
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:
Collateral2023 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 property12,350,000 12,350,000 3.85%3.85%11/01/2029
OES property13,161,357 13,315,009 4.50%4.50%3/09/2024
Total mortgage notes payable44,361,357 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, 2023December 31, 2022
Face ValueCarrying
Value		Fair ValueFace valueCarrying
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 NotesCredit Facility
PayableRevolverTerm LoanTotal
July through December 2023$160,349 $— $— $160,349 
202413,270,624 — — 13,270,624 
2025543,886 — — 543,886 
2026568,369 — — 568,369 
2027593,972 — 250,000,000 250,593,972 
Thereafter29,224,157 — — 29,224,157 
Total principal44,361,357 — 250,000,000 294,361,357 
Plus unamortized mortgage premium, net66,679 — — 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,
2023202220232022
Mortgage notes payable:
Interest expense$471,092 $460,886 $943,032 $1,273,605 
Amortization of deferred financing costs7,235 7,235 14,470 14,459 
Credit facility:
Interest expense3,997,972 1,098,435 6,386,908 1,666,432 
Unused commitment fees103,403 — 289,639 22,233 
Derivative cash settlements (1)(1,401,716)— (2,475,801)— 
Amortization of deferred financing costs214,261 120,830 428,522 221,520 
Unrealized gain on interest rate swap valuation for first swap (2)(1,639,768)(589,997)(495,750)(589,997)
Amortization of interest rate swap valuation (2)(253,092)— (503,403)— 
Unrealized gain on interest rate swap valuation for second swap (3)(1,815,737)— (987,262)— 
Other136,419 99,765 238,506 157,077 
Interest expense, net$(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)