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Note 12 - Segments
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

12. 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, 2021 and 2020, respectively.

 

  

For the Year Ended December 31,

 
  

2021

  

2020

 

Office/Industrial Properties:

        

Rental, fees and other income

 $13,161,268  $17,128,687 

Property and related expenses

  (5,769,843)  (7,977,561)

Net operating income, as defined

  7,391,425   9,151,126 

Model Home Properties:

        

Rental, fees and other income

  3,211,149   4,251,980 

Property and related expenses

  (129,389)  (202,667)

Net operating income, as defined

  3,081,760   4,049,313 

Retail Properties:

        

Rental, fees and other income

  3,023,316   2,971,125 

Property and related expenses

  (1,056,581)  (2,368,906)

Net operating (loss) income, as defined

  1,966,735   602,219 

Reconciliation to net loss:

        

Total net operating income, as defined, for reportable segments

  12,439,920   13,802,658 

General and administrative expenses

  (6,225,510)  (5,751,754)

Depreciation and amortization

  (5,397,498)  (6,274,321)

Interest expense

  (4,822,085)  (8,813,067)

Deferred offering costs

  —   (530,639)

Gain on extinguishment of government debt

  10,000   451,785 

Other income (expense), net

  (3,417)  (20,636)

Income tax expense

  47,620   (370,884)

Gain on sale of real estate

  2,487,528   1,245,460 

Net loss

 $(1,463,442) $(6,261,398)

 

  

December 31,

  

December 31,

 

Assets by Reportable Segment:

 

2021

  

2020

 

Office/Industrial Properties:

        

Land, buildings and improvements, net (1)

 $78,240,086  $99,120,649 

Total assets (2)

 $76,453,436  $100,046,782 

Model Home Properties:

        

Land, buildings and improvements, net (1)

 $34,089,046  $42,509,596 

Total assets (2)

 $31,047,202  $42,246,022 

Retail Properties:

        

Land, buildings and improvements, net (1)

 $25,693,239  $24,555,371 

Total assets (2)

 $27,579,469  $26,108,109 

Reconciliation to Total Assets:

        

Total assets for reportable segments

 $135,080,107  $168,400,913 

Other unallocated assets:

        

Cash, cash equivalents and restricted cash

  6,738,345   2,149,088 

Other assets, net

  19,378,311   15,018,615 

Total Assets

 $161,196,763  $185,568,616 

 

(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

 

2021

  

2020

 

Office/Industrial Properties:

        

Acquisition of operating properties

 $8,891,810  $— 

Capital expenditures and tenant improvements

  1,513,362   2,825,169 

Model Home Properties:

        

Acquisition of operating properties

  8,426,750   10,161,613 

Retail Properties:

        

Acquisition of operating properties

  4,906,266   — 

Capital expenditures and tenant improvements

  83,824   9,205 

Totals:

        

Acquisition of operating properties, net

  22,224,826   10,161,613 

Capital expenditures and tenant improvements

  1,597,186   2,834,373 

Total real estate investments

 $23,822,012  $12,995,986