11. SEGMENTS

The Company’s reportable segments consist of the four types of commercial real estate properties for which the Company’s decision-makers internally evaluate operating performance and financial results: Residential Properties, Industrial and Office Properties, Retail Properties; and Self-Storage Properties (sold on April 10, 2015). The Company also has certain corporate level activities including accounting, finance, legal administration and management information systems which are not considered separate operating segments. The accounting policies of the reportable segments are the same as those described in Note 2. There is no intersegment activity.

The Company evaluates the performance of its segments based upon net operating income (“NOI”), which is a non-GAAP supplemental financial measure. The Company defines NOI for its segments as operating revenues (rental income, tenant reimbursements and other operating income) less property and related expenses (property operating expenses, real estate taxes, insurance, asset management fees, impairments and provision for bad debt) less interest expense. NOI excludes certain items that are not considered to be controllable in connection with the management of an asset such as non-property income and expenses, depreciation and amortization, real estate acquisition fees and expenses and corporate general and administrative expenses. The Company uses NOI to evaluate the operating performance of the Company’s real estate investments and to make decisions about resource allocations.

The following tables reconcile the Company’s segment activity to its results of operations and financial position as of and for the three and nine months ended September 30, 2015 and 2014.

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2015			2014			2015			2014
Office/Industrial Properties:
Rental income	$	4,715,807		$	3,122,426		$	13,075,111		$	8,368,703
Property and related expenses		(1,679,926	)		(1,277,080	)		(4,885,154	)		(3,418,279	)
Net operating income, as defined		3,035,881			1,845,346			8,189,957			4,950,424
Residential Properties:
Rental income		414,286			479,400			1,117,616			1,723,462
Property and related expenses		(15,530	)		(18,212	)		(50,377	)		(63,055	)
Net operating income, as defined		398,756			461,188			1,067,239			1,660,407
Retail Properties:
Rental income		981,509			649,649			2,952,646			1,921,338
Property and related expenses		(206,998	)		(228,010	)		(876,694	)		(657,814	)
Net operating income, as defined		774,511			421,639			2,075,952			1,263,524
Self-Storage Properties (discontinued operations):
Rental income		-			833,648			1,052,266			2,543,326
Property and related expenses		-			(849,325	)		(1,183,641	)		(2,419,313	)
Gain on sale of real estate		-			-			4,730,398			(156,651	)
Net operating (loss) income, as defined		-			(15,677	)		4,599,023			(32,638	)
Reconciliation to net (loss) income:
Total net operating income, as defined, for reportable segments		4,209,148			2,712,496			15,932,171			7,841,717
General and administrative expenses		(1,181,714	)		(1,200,536	)		(3,475,628	)		(3,889,185	)
Depreciation and amortization		(1,884,193	)		(1,448,108	)		(5,560,525	)		(3,887,117	)
Interest expense		(2,630,737	)		(1,476,284	)		(7,286,351	)		(3,675,339	)
Interest income		26,220			15,418			61,976			75,577
Real estate asset impairments		-			(950,000	)		-			(950,000	)
Gain on sales of real estate and partnerships, net		10,858			1,221,680			1,205,612			2,885,485
Net (loss) income	$	(1,450,418	)	$	(1,125,334	)	$	877,255		$	(1,598,862	)

	September 30,		December 31,
Assets by Reportable Segment:	2015		2014

Office/Industrial Properties:
Land, buildings and improvements, net (1)	$	153,671,739	$	122,351,316
Total assets (2)	$	166,127,174	$	130,185,089
Residential Properties:
Land, buildings and improvements, net (1)	$	13,647,962	$	13,133,827
Total assets (2)	$	14,494,846	$	13,588,922
Retail Properties:
Land, buildings and improvements, net (1)	$	35,648,243	$	33,141,294
Total assets (2)	$	37,796,814	$	34,712,223
Self-Storage Properties (real estate held for sale):
Land, buildings and improvements, net (1)	$	—	$	29,107,675
Total assets (2)	$	—	$	30,003,506
Reconciliation to Total Assets:
Total assets for reportable segments	$	218,418,834	$	208,489,740
Other unallocated assets:
Cash and cash equivalents		11,146,053		5,636,002
Other assets, net		8,471,759		6,499,196
Total Assets	$	238,036,646	$	220,624,938

(1)	Includes lease intangibles and the land purchase option related to property acquisitions.

(2)	Includes land, buildings and improvements, current receivables, deferred rent receivables and deferred leasing costs and other related intangible assets, all shown on a net basis.

Capital Expenditures by Reportable Segment	For the nine months ended
	September 30,
	2015		2014
Office/Industrial Properties:
Acquisition of operating properties	$	33,958,263	$	14,763,625
Capital expenditures and tenant improvements		2,313,655		1,506,016

Residential Properties:
Acquisition of operating properties		5,720,000		2,745,900

Retail Properties:
Acquisition of retail properties		2,850,000
Capital expenditures and tenant improvements		41,333		402,799

Self-Storage Properties (real estate held for sale):
Capital expenditures and tenant improvements		-		69,560

Totals:
Acquisition of operating properties, net		42,528,263		17,509,525
Capital expenditures and tenant improvements		2,354,988		1,978,375
Total real estate investments	$	44,883,251	$	19,487,900