14. SEGMENTS

The Company’s reportable segments consist of the three types of commercial real estate properties for which the Company’s decision-makers internally evaluate operating performance and financial results: Office/Industrial/Medical Properties, Residential and Retail Properties. 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 years ended December 31, 2016 and 2015, respectively.

	For the Year Ended December 31,
	2016			2015
Office/Industrial/Medical Properties:
Rental income	$	25,564,763		$	18,497,621
Property and related expenses		(8,747,722	)		(7,170,550	)
Net operating income, as defined		16,817,041			11,327,071
Residential Properties:
Rental income		2,278,832			1,521,148
Property and related expenses		(113,187	)		(63,875	)
Net operating income, as defined		2,165,645			1,457,273
Retail Properties:
Rental income		4,608,517			3,960,076
Property and related expenses		(1,274,436	)		(1,280,726	)
Net operating income, as defined		3,334,081			2,679,350
Self-Storage Properties (discontinued operations):
Rental income		-			1,052,266
Property and related expenses		-			(1,183,641	)
Net operating income, as defined		-			(131,375	)
Reconciliation to net loss:
Total net operating income, as defined, for reportable segments		22,316,767			15,332,319
General and administrative expenses		(5,424,479	)		(5,193,888	)
Depreciation and amortization		(10,256,185	)		(7,784,917	)
Interest expense		(13,531,337	)		(10,774,660	)
Interest income		85,723			150,008
Gain on sale of real estate		2,186,481			6,243,640
Impairment of real estate		(948,053	)		-
Net loss	$	(5,571,083	)	$	(2,027,498	)

	December 31,		December 31,
Assets by Reportable Segment:	2016		2015

Office/Industrial/Medical Properties:
Land, buildings and improvements, net (1)	$	172,309,537	$	178,776,776
Total assets (2)	$	175,689,722	$	188,805,090
Residential Properties:
Land, buildings and improvements, net (1)	$	34,813,680	$	16,888,267
Total assets (2)	$	35,960,179	$	14,395,904
Retail Properties:
Land, buildings and improvements, net (1)	$	33,398,992	$	35,395,235
Total assets (2)	$	35,320,092	$	36,747,069
Reconciliation to Total Assets:
Total assets for reportable segments	$	246,969,993	$	239,948,063
Other unallocated assets:
Cash and cash equivalents		3,116,147		6,626,423
Other assets, net		7,912,937		7,699,907
Total Assets	$	257,999,077	$	254,274,393

(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 Year Ended December 31,
	2016		2015
Office/Industrial/Medical Properties:
Acquisition of operating properties	$	-	$	59,223,876
Capital expenditures and tenant improvements		4,092,875		2,800,100

Residential Properties:
Acquisition of operating properties		23,667,535		5,720,540

Retail Properties:
Acquisition of retail properties		-		2,908,176
Capital expenditures and tenant improvements		57,338		54,839

Totals:
Acquisition of operating properties, net		23,667,535		67,852,592
Capital expenditures and tenant improvements		4,150,213		2,854,939
Total real estate investments	$	27,817,748	$	70,707,531

(1)	Total consolidated capital expenditures are equal to the same amounts disclosed for total reportable segments.