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Note 13 - Segments
 12 Months Ended
Dec. 31, 2020
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

13. 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, 2020 and 2019, respectively.

   

For the Year Ended December 31,

  
   

2020

    

2019

  

Office/Industrial Properties:

                

Rental, fees and other income

   $ 17,580,472     $ 21,490,215  

Property and related expenses

     (7,977,561 )     (9,317,720 )

Net operating income, as defined

     9,602,911       12,172,495  

Model Home Properties:

                

Rental, fees and other income

     4,251,980       4,194,489  

Property and related expenses

     (202,667 )     (193,367 )

Net operating income, as defined

     4,049,313       4,001,122  

Retail Properties:

                

Rental, fees and other income

     2,971,125       2,956,407  

Property and related expenses

     (2,368,906 )     (899,487 )

Net operating income, as defined

     602,219       2,056,920  

Reconciliation to net loss:

                

Total net operating income, as defined, for reportable segments

     14,254,443       18,230,537  

General and administrative expenses

     (5,751,754 )     (5,268,315 )

Depreciation and amortization

     (6,274,321 )     (7,364,688 )

Interest expense

     (8,813,067 )     (10,649,646 )

Deferred offering costs

     (530,639 )     —  

Other income (expense), net

     (20,636 )     117,037  

Income tax expense

     (370,884 )     (611,263 )

Gain on sale of real estate

     1,245,460       6,319,272  

Net loss

   $ (6,261,398 )   $ 772,934  

 

   

December 31,

    

December 31,

  

Assets by Reportable Segment:

  

2020

    

2019

  

Office/Industrial Properties:

                

Land, buildings and improvements, net (1)

   $ 99,120,649     $ 126,421,648  

Total assets (2)

   $ 100,046,782     $ 131,180,612  

Model Home Properties:

                

Land, buildings and improvements, net (1)

   $ 42,509,596     $ 48,466,371  

Total assets (2)

   $ 42,246,022     $ 51,389,400  

Retail Properties:

                

Land, buildings and improvements, net (1)

   $ 24,555,371     $ 25,318,601  

Total assets (2)

   $ 26,108,109     $ 26,588,254  

Reconciliation to Total Assets:

                

Total assets for reportable segments

   $ 168,400,913     $ 209,158,266  

Other unallocated assets:

                

Cash, cash equivalents and restricted cash

     2,149,088       1,591,041  

Other assets, net

     15,018,615       10,035,101  

Total Assets

   $ 185,568,616     $ 220,784,408  

 

(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.

 

   

For the Year Ended December 31,

  

Capital Expenditures by Reportable Segment

  

2020

    

2019

  

Office/Industrial Properties:

                

Capital expenditures and tenant improvements

   $ 2,825,168     $ 6,373,464  

Model Home Properties:

                

Acquisition of operating properties

     10,161,613       13,037,562  

Retail Properties:

                

Capital expenditures and tenant improvements

     9,205       20,247  

Totals:

                

Acquisition of operating properties, net

     10,161,613       13,037,562  

Capital expenditures and tenant improvements

     2,834,373       6,393,711  

Total real estate investments

   $ 12,995,986     $ 19,431,273