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SEGMENTS

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

SEGMENTS

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 Properties, Model Homes 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 significant 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) excluding 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, 2019 and 2018, respectively.

			For the Year Ended December 31,
			2019						2018
Office/Industrial Properties:
Rental income			$	21,490,215					$	24,037,363
Property and related expenses			(9,317,720)						(9,494,885)
Net operating income, as defined			12,172,495						14,542,478
Model Home Properties:
Rental income			4,194,489						4,642,159
Property and related expenses			(193,367)						(174,238)
Net operating income, as defined			4,001,122						4,467,921
Retail Properties:
Rental income			2,956,407						3,664,491
Property and related expenses			(899,487)						(1,217,596)
Net operating income, as defined			2,056,920						2,446,895
Reconciliation to net income:
Total net operating income, as defined, for reportable segments			18,230,537						21,457,294
General and administrative expenses			(5,268,315)						(4,532,703)
Depreciation and amortization			(7,364,688)						(9,101,605)
Interest expense			(10,649,646)						(13,041,016)
Interest income			141,306						55,909
Gain on sale of real estate			6,319,272						12,200,138
Deferred offering cost			—						(1,507,599)
Impairment of real estate			—						(532,951)
Acquisition costs			(24,269)						(26,177)
Income tax expense			(611,263)						(518,567)
Net income			$	772,934					$	4,452,723

Assets by Reportable Segment:			December 31, 2019						December 31, 2018
Office/Industrial Properties:
Land, buildings and improvements, net (1)			$	126,421,648					$	138,694,773
Total assets (2)			$	131,180,612					$	143,620,315
Model Home Properties:
Land, buildings and improvements, net (1)			$	48,466,371					$	48,762,869
Total assets (2)			$	51,389,400					$	48,864,060
Retail Properties:
Land, buildings and improvements, net (1)			$	25,318,601					$	23,650,423
Total assets (2)			$	26,588,254					$	27,702,384
Reconciliation to Total Assets:
Total assets for reportable segments			$	209,158,266					$	220,186,759
Other unallocated assets:
Cash and cash equivalents			10,391,275						9,776,215
Other assets, net			1,234,867						3,087,066
Total Assets			$	220,784,408					$	233,050,040

________________________________________________________

(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,
			2019						2018
Office/Industrial Properties:
Capital expenditures and tenant improvements			$	6,373,464					$	3,340,023
Model Home Properties:
Acquisition of operating properties			13,037,562						17,326,915
Retail Properties:
Capital expenditures and tenant improvements			20,247						19,260
Totals:
Acquisition of operating properties, net			13,037,562						17,326,915
Capital expenditures and tenant improvements			6,393,711						3,359,283
Total real estate investments			$	19,431,273					$	20,686,198

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- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

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