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UNCONSOLIDATED INVESTMENT IN REAL ESTATE PROPERTY | 9 Months Ended
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Sep. 30, 2024
Investments, Debt and Equity Securities [Abstract] |
UNCONSOLIDATED INVESTMENT IN REAL ESTATE PROPERTY | UNCONSOLIDATED INVESTMENT IN REAL ESTATE PROPERTY The Company’s investment in unconsolidated property as of September 30, 2024 and December 31, 2023 is as follows:
|  | September 30, 2024 |  | December 31, 2023
The TIC Interest |  | $ | 9,490,189 |  |  | $ | 10,053,931 |
The Company’s income from investment in unconsolidated property for the three and nine months ended September 30, 2024 and 2023 is as follows:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2024 |  | 2023 |  | 2024 |  | 2023
The TIC Interest |  | $ | 74,509 |  |  | $ | 79,166 |  |  | $ | 222,574 |  |  | $ | 207,506 |
TIC Interest During 2017, the Company, through a wholly-owned subsidiary of the Operating Partnership, acquired an approximate 72.7% TIC Interest. The remaining approximate 27.3% interest in the Santa Clara, California property is held by third parties. The Company and the third parties each hold an individual, undivided ownership interest in the Santa Clara property. Undivided ownership interests are arrangements in which two or more parties jointly own the property and the title is held individually to the extent of each party’s interest. Based upon the nature of the Company’s interest, consolidation is not appropriate, as the consolidation guidance applies to the consolidation of separate legal entities. As the Santa Clara property is subject to joint control, the Company accounts for its TIC Interest using the equity method. The property lease expiration date is March 16, 2026, and the lease provides for three five-year renewal options. The mortgage on this property bears interest at 3.86% and has a maturity date of October 1, 2027. The Company receives an approximate 72.7% of the cash flow distributions and recognizes approximately 72.7% of the results of operations. During the three months ended September 30, 2024 and 2023, the Company received cash distributions of $241,106 and $54,706, respectively, from the TIC Interest, and $786,316 and $179,121 during the nine months ended September 30, 2024 and 2023, respectively. As part of the Company’s continued effort to increase balance sheet simplicity, management is currently exploring opportunities to acquire the minority interests in the property in which we hold the TIC Interest, which would result in consolidation of the asset, or to sell the TIC Interest. The following is summarized financial information for the Santa Clara property as of September 30, 2024 and December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023:
|  | September 30, 2024 |  | December 31, 2023
Assets: |  |  |  |
Real estate investments, net |  | $ | 27,789,089 |  |  | $ | 28,563,746 |
Cash and cash equivalents |  | 426,652 |  |  | 482,653 |
Other assets |  | 81,525 |  |  | 79,639 |
Total assets |  | $ | 28,297,266 |  |  | $ | 29,126,038 |
Liabilities: |  |  |  |
Mortgage note payable, net |  | $ | 12,415,632 |  |  | $ | 12,642,798 |
Below-market lease, net |  | 2,258,022 |  |  | 2,367,812 |
Other liabilities |  | 571,502 |  |  | 287,989 |
Total liabilities |  | 15,245,156 |  |  | 15,298,599 |
Total equity |  | 13,052,110 |  |  | 13,827,439 |
Total liabilities and equity |  | $ | 28,297,266 |  |  | $ | 29,126,038 |
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2024 |  | 2023 |  | 2024 |  | 2023
Income |  | $ | 684,904 |  |  | $ | 693,170 |  |  | $ | 2,067,396 |  |  | $ | 2,036,365 |
Expenses: |  |  |  |  |  |  |  |
Depreciation and amortization |  | 259,846 |  |  | 257,844 |  |  | 779,517 |  |  | 780,802 |
Other expenses |  | 193,239 |  |  | 193,902 |  |  | 594,020 |  |  | 572,749 |
Total expenses |  | 453,085 |  |  | 451,746 |  |  | 1,373,537 |  |  | 1,353,551 |
Operating income |  | 231,819 |  |  | 241,424 |  |  | 693,859 |  |  | 682,814 |
Interest expense |  | 129,343 |  |  | 132,547 |  |  | 387,746 |  |  | 395,810 |
Net income |  | $ | 102,476 |  |  | $ | 108,877 |  |  | $ | 306,113 |  |  | $ | 287,004 |

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 740 -SubTopic 323 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478156/740-323-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org/323/tableOfContent + Details
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