11. SEGMENTS

The Company’s reportable segments consist of three types of commercial real estate properties for which the Company’s decision-makers internally evaluate operating performance and financial results: Office/Industrial/Mixed Use 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 and six months ended June 30, 2017 and 2016.

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
Office/Industrial Properties:
Rental income	$	6,535,722		$	6,200,968		$	12,779,101		$	13,194,587
Property and related expenses		(2,295,720	)		(2,140,237	)		(4,514,238	)		(4,373,491	)
Net operating income, as defined		4,240,002			4,060,731			8,264,864			8,821,096
Residential Properties:
Rental income		930,062			567,281			1,806,607			955,681
Property and related expenses		(35,038	)		(61,376	)		(73,995	)		(78,416	)
Net operating income, as defined		895,024			505,905			1,732,612			877,265
Retail/Mixed Use Properties:
Rental income		1,052,289			1,038,025			2,178,893			2,088,023
Property and related expenses		(305,304	)		(383,400	)		(684,933	)		(606,457	)
Net operating income, as defined		746,985			654,625			1,493,960			1,481,566
Reconciliation to net loss:
Total net operating income, as defined, for reportable segments		5,882,011			5,221,261			11,491,436			11,179,927
General and administrative expenses		(1,439,820	)		(1,232,319	)		(2,629,837	)		(2,462,730	)
Depreciation and amortization		(2,443,817	)		(2,499,630	)		(4,947,333	)		(5,159,161	)
Interest expense		(3,311,421	)		(3,501,199	)		(6,627,617	)		(6,864,243	)
Interest income		5,829			46,593			15,097			68,332
Income tax expense		(13,746	)		(76,152	)		(108,356	)		(144,700	)
Gain on sale of real estate		1,485,589			1,213,060			2,027,051			1,388,545
Net income (loss)	$	164,625		$	(828,386	)	$	(779,559	)	$	(1,994,030	)

	June 30,		December 31,
Assets by Reportable Segment:	2017		2016

Office/Industrial Properties:
Land, buildings and improvements, net (1)	$	162,357,260	$	172,309,537
Total assets (2)	$	166,648,955	$	175,689,722
Residential Properties:
Land, buildings and improvements, net (1)	$	38,280,020	$	34,813,680
Total assets (2)	$	39,265,806	$	35,960,179
Retail/Mixed Use Properties:
Land, buildings and improvements, net (1)	$	31,893,613	$	33,398,992
Total assets (2)	$	32,680,626	$	35,320,092
Reconciliation to Total Assets:
Total assets for reportable segments	$	238,595,388	$	246,969,993
Other unallocated assets:
Cash and cash equivalents		5,847,369		3,116,147
Other assets, net		9,636,602		7,912,937
Total Assets	$	254,079,359	$	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 Six Months Ended June 30,
	2017		2016
Office/Industrial Properties:
Capital expenditures and tenant improvements	$	1,783,814	$	2,309,976

Residential Properties:
Acquisition of operating properties		9,694,785		7,768,755

Retail/Mixed Use Properties:
Capital expenditures and tenant improvements		35,777		21,353

Totals:
Acquisition of operating properties, net		9,694,785		7,768,755
Capital expenditures and tenant improvements		1,819,591		2,331,329
Total real estate investments	$	11,514,376	$	10,100,084