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: Office/Industrial/Medical Properties, Residential Properties 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 inter segment 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). 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 months ended March 31, 2017 and 2016.

	For the Three Months Ended March 31,
	2017			2016
Office/Industrial/Medical Properties:
Rental income	$	6,289,692		$	7,019,176
Property and related expenses		(2,218,518	)		(2,232,590	)
Net operating income, as defined		4,071,174			4,786,586
Residential Properties:
Rental income		830,231			388,400
Property and related expenses		(38,956	)		(17,704	)
Net operating income, as defined		791,275			370,696
Retail Properties:
Rental income		1,126,604			1,049,998
Property and related expenses		(379,629	)		(223,057	)
Net operating income, as defined		746,975			826,941
Reconciliation to net loss:
Total net operating income, as defined, for reportable segments		5,609,424			5,984,223
General and administrative expenses		(1,257,211	)		(1,230,411	)
Depreciation and amortization		(2,503,516	)		(2,659,531	)
Interest expense		(3,316,196	)		(3,388,602	)
Interest income		9,268			21,739
Income tax expense		(27,416	)		(68,548	)
Gain on sale of real estate		541,462			175,486
Net loss	$	(944,185	)	$	(1,165,644	)

	March 31,		December 31,
Assets by Reportable Segment:	2017		2016

Office/Industrial/Medical Properties:
Land, buildings and improvements, net (1)	$	169,196,732	$	172,309,537
Total assets (2)	$	171,270,735	$	175,689,722
Residential Properties:
Land, buildings and improvements, net (1)	$	33,834,310	$	34,813,680
Total assets (2)	$	34,346,130	$	35,960,179
Retail Properties:
Land, buildings and improvements, net (1)	$	31,340,544	$	33,398,992
Total assets (2)	$	32,904,933	$	35,320,092
Reconciliation to Total Assets:
Total assets for reportable segments	$	238,521,798	$	246,969,993
Other unallocated assets:
Cash and cash equivalents		4,534,501		3,116,147
Other assets, net		8,924,122		7,912,937
Total Assets	$	251,980,421	$	257,999,077

(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 Three Months Ended March 31,
	2017		2016
Office/Industrial/Medical Properties:
Capital expenditures and tenant improvements	$	927,668	$	748,800

Residential Properties:
Acquisition of operating properties		-		7,399,545

Retail Properties:
Capital expenditures and tenant improvements		35,777		1,192

Totals:
Acquisition of operating properties, net		-		7,399,545
Capital expenditures and tenant improvements		963,445		749,992
Total real estate investments	$	963,445	$	8,149,537