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Real Estate Assets and Lease Intangibles | 9 Months Ended
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Sep. 30, 2014
Real Estate Assets and Lease Intangibles [Abstract] |
Real Estate Assets and Lease Intangibles | 3. REAL ESTATE ASSETS AND LEASE INTANGIBLES A summary of the properties owned by the Company as of September 30, 2014 is as follows:
Property Name | Date Acquired | Location |  | Square Footage |  | Property Description |  | Real estate assets, net (in thousands) |
Havana/Parker Complex | June 2006 | Aurora, Colorado |  |  | 114,000 |  | Office |  | $ | 2,329.6 |
Garden Gateway Plaza | March 2007 | Colorado Springs, Colorado |  |  | 115,052 |  | Office |  |  | 12,208.8 |
World Plaza | September 2007 | San Bernardino, California |  |  | 55,098 |  | Retail |  |  | 6,564.8 |
Regatta Square | October 2007 | Denver, Colorado |  |  | 5,983 |  | Retail |  |  | 1,907.3 |
Sparky's Palm Self-Storage | November 2007 | Highland, California |  |  | 60,865 |  | Self-Storage |  |  | 4,293.7 |
Sparky's Joshua Self-Storage | December 2007 | Hesperia, California |  |  | 151,000 |  | Self-Storage |  |  | 6,696.1 |
Executive Office Park | July 2008 | Colorado Springs, Colorado |  |  | 65,084 |  | Office |  |  | 8,296.1 |
Waterman Plaza | August 2008 | San Bernardino, California |  |  | 21,170 |  | Retail |  |  | 6,029.5 |
Pacific Oaks Plaza | September 2008 | Escondido, California |  |  | 16,000 |  | Office |  |  | 4,315.2 |
Morena Office Center | January 2009 | San Diego, California |  |  | 26,784 |  | Office |  |  | 5,514.2 |
Fontana Medical Plaza | February 2009 | Fontana, California |  |  | 10,500 |  | Office |  |  | 1,920.9 |
Rangewood Medical Office Building | March 2009 | Colorado Springs, Colorado |  |  | 18,222 |  | Office |  |  | 2,374.9 |
Sparky's Thousand Palms Self-Storage | August 2009 | Thousand Palms, California |  |  | 113,126 |  | Self-Storage |  |  | 5,401.4 |
Sparky's Hesperia East Self-Storage | December 2009 | Hesperia, California |  |  | 73,640 |  | Self-Storage |  |  | 2,385.5 |
Sparky's Rialto Self-Storage | May 2010 | Rialto, California |  |  | 101,359 |  | Self-Storage |  |  | 4,707.5 |
Genesis Plaza | August 2010 | San Diego, California |  |  | 57,685 |  | Office |  |  | 8,711.8 |
Dakota Bank Buildings | May 2011 | Fargo, North Dakota |  |  | 119,749 |  | Office |  |  | 10,064.0 |
Yucca Valley Retail Center | September 2011 | Yucca Valley, California |  |  | 103,596 |  | Retail |  |  | 7,283.8 |
Sparky's Sunrise Self-Storage | December 2011 | Hesperia, California |  |  | 93,851 |  | Self-Storage |  |  | 2,149.1 |
Port of San Diego Complex | December 2011 | San Diego, California |  |  | 146,700 |  | Industrial |  |  | 13,893.5 |
Shoreline Medical Building | May 2012 | Half Moon Bay, California |  |  | 15,335 |  | Office |  |  | 6,028.2 |
The Presidio | November 2012 | Colorado Springs, Colorado |  |  | 80,800 |  | Office |  |  | 6,752.9 |
Sparky's Lancaster | May 2013 | Lancaster, CA |  |  | 71,000 |  | Self-Storage |  |  | 3,626.5 |
Bismarck | April 2014 | Bismarck, ND |  |  | 93,000 |  | Office |  |  | 5,082.7 |
Union Terrace | August 2014 | Lakewood, CO |  |  | 84,000 |  | Office |  |  | 9,261.5 |
NetREIT, Inc. properties |  |  |  |  |  |  |  |  |  | 147,799.5 |
|  |  |  | Model Homes |  |  |  |  |  |
Model Home properties held in limited partnerships | Various in 2009-2014 | CA, AZ, WA, TX, SC, NC and NJ |  |  | 41 |  | Residential |  |  | 10,390.1 |
Model Home properties held in income and investment funds | Various in 2010-2014 | CA, AZ, TX, SC, PA, NJ |  |  | 14 |  | Residential |  |  | 4,089.3 |
Model Home properties |  |  |  |  | 55 |  |  |  |  | 14,479.4 |
Total real estate assets and lease intangibles, net |  |  |  | $ | 162,278.9 |
The following table sets forth the components of the Company's real estate assets:
|  | September 30, 2014 |  |  | December 31, 2013 |
Land |  | $ | 42,758,064 |  |  | $ | 41,882,217 |
Buildings and other |  |  | 128,861,514 |  |  |  | 128,085,648 |
Tenant improvements |  |  | 10,740,256 |  |  |  | 7,344,151 |
Lease intangibles |  |  | 5,595,554 |  |  |  | 4,569,854 |
|  |  | 187,955,388 |  |  |  | 181,881,870 |
Less: |  |  |  |  |  |  |  |
Accumulated depreciation and amortization |  |  | (25,676,481 | ) |  |  | (22,426,708 | )
Real estate assets, net |  | $ | 162,278,907 |  |  | $ | 159,455,162 |
Operations from each property are included in the Company's condensed consolidated financial statements from the date of acquisition. Recent Acquisitions In August 2014, the Company acquired The Union Terrace Office building for the purchase price of approximately $9.4 million plus closing costs. The Property is a four-story office building with approximately 84,000 rentable square feet located in Lakewood, Colorado. The Company acquired the property with a cash payment of approximately $2.8 million and an interest only fixed rate mortgage note $6.6 million that bears interest 4.5% per annum and is due in August 2024. In August 2014, the Company, through certain subsidiaries, acquired three Model Home properties in Arizona and leased them back to the home builder. The purchase price for the properties was $1.0 million. The purchase price paid was through a cash payment of $0.4 million and a promissory note $0.6 million. In April 2014, the Company acquired The Bismarck Office Building for the purchase price of approximately $5.4 million plus closing costs. The property is a six-story office building with of approximately 93,000 rentable square feet located in Bismarck, North Dakota. The Company acquired the property with cash of approximately $2.2 million and a $3.2 million fixed rate mortgage note that bears interest at 6.12% per annum and is due in October 2016. In February 2014, the Company, through certain subsidiaries, acquired six Model Home properties in Pennsylvania and leased them back to the home builder. The purchase price for the properties was $1.8 million. The purchase price paid was through a cash payment of $0.7 million and a promissory note $1.1 million. The Company disposed of the following properties in the nine months ended September 30, 2014: During the nine months ended September 30, 2014, NetREIT Dubose and the other Model Home entities disposed of thirty-two model home properties. The sales price, net of selling costs, aggregated approximately $13.5 million and approximately $5.6 million in mortgage notes payable were retired in connection with these sales. The Company recognized a gain of approximately $2.4 million related to the sale of these Model Homes. The Company allocated the purchase price of the properties acquired during the nine months ended September 30, 2014 as follows:
|  | Land |  |  | Buildings and other |  |  | Tenant Improvements |  |  | In-place Leases |  |  | Leasing Costs |  |  | Total Purchase Price |
Model Home Properties |  | $ | 371,300 |  |  | $ | 1,410,000 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 1,781,300 |
Bismarck Office Building |  |  | 413,000 |  |  | $ | 4,233,700 |  |  | $ | 474,400 |  |  | $ | 164,300 |  |  | $ | 64,600 |  |  | $ | 5,350,000 |
Union Terrace |  | $ | 1,717,000 |  |  | $ | 5,267,900 |  |  | $ | 1,643,300 |  |  | $ | 370,100 |  |  | $ | 426,700 |  |  | $ | 9,425,000 |
Lease Intangibles The following table summarizes the net value of other intangible assets and the accumulated amortization for each class of intangible asset:
|  | September 30, 2014 |  |  | December 31, 2013 |
|  | Lease intangibles |  |  | Accumulated amortization |  |  | Lease intangibles net |  |  | Lease intangibles |  |  | Accumulated amortization |  |  | Lease intangibles net |
In-place leases |  | $ | 2,549,859 |  |  | $ | (1,737,418 | ) |  | $ | 812,441 |  |  | $ | 2,015,459 |  |  | $ | (1,493,808 | ) |  | $ | 521,651 |
Leasing costs |  |  | 1,940,285 |  |  |  | (1,149,492 | ) |  |  | 790,793 |  |  |  | 1,448,985 |  |  |  | (999,444 | ) |  |  | 449,541 |
Tenant relationships |  |  | 332,721 |  |  |  | (332,721 | ) |  |  | - |  |  |  | 332,721 |  |  |  | (332,721 | ) |  |  | - |
Below-market leases |  |  | (841,425 | ) |  |  | 86,499 |  |  |  | (754,926 | ) |  |  | (841,425 | ) |  |  | 65,463 |  |  |  | (775,962 | )
Above-market leases |  |  | 1,614,114 |  |  |  | (1,156,745 | ) |  |  | 457,369 |  |  |  | 1,614,114 |  |  |  | (1,018,516 | ) |  |  | 595,598 |
|  | $ | 5,595,554 |  |  | $ | (4,289,877 | ) |  | $ | 1,305,677 |  |  | $ | 4,569,854 |  |  | $ | (3,779,026 | ) |  | $ | 790,828 |
As of September 30, 2014, the estimated aggregate net amortization expense for each of the five succeeding fiscal years and thereafter is as follows:
|  | Estimated Aggregate Net Amortization Expense |
Three months remaining in 2014 |  | $ | 212,224 |
2015 |  |  | 611,168 |
2016 |  |  | 250,315 |
2017 |  |  | 130,380 |
2018 |  |  | 81,797 |
Thereafter |  |  | 19,793 |
|  | $ | 1,305,677 |
The weighted average amortization period for the intangible assets, in-place leases, leasing costs, tenant relationships and below-market leases acquired as of September 30, 2014 was approximately 16.0 years.

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- Definition The entire disclosure of real estate investments and associated accumulated depreciation for entities with a significant portion of their business acquiring and holding investment real estate. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 970 -SubTopic 360 -Section S99 -Paragraph 1 -Subparagraph (SX 210.12-28) -URI http://asc.fasb.org/extlink&oid=6590653&loc=d3e638233-123024 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section S99 -Paragraph 6 -Subparagraph (SX 210.5-04.(c) Schedule III) -URI http://asc.fasb.org/extlink&oid=27047687&loc=d3e5864-122674 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 28 -Article 12 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Paragraph c -Subparagraph Schedule III -Article 5 + Details
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