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Note 12 - Segments
 6 Months Ended
Jun. 30, 2022
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

12. SEGMENTS

 

The Company’s reportable segments consist of three types of real estate properties for which the Company’s decision-makers internally evaluate operating performance and financial results: Office/Industrial Properties, Model Home 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.  There is no material 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 regarding allocation of resources.

 

The following tables compare 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, 2022 and June 30, 2021:

 

  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2022

  

2021

  

2022

  

2021

 

Office/Industrial Properties:

                

Rental, fees and other income

 $3,150,251  $3,317,847  $6,273,139  $7,260,652 

Property and related expenses

  (1,174,391)  (1,262,483)  (2,530,925)  (3,116,754)

Net operating income, as defined

  1,975,860   2,055,364   3,742,214   4,143,898 

Model Home Properties:

                

Rental, fees and other income

  696,964   845,412   1,407,292   1,789,190 

Property and related expenses

  (25,440)  (30,215)  (53,208)  (80,501)

Net operating income, as defined

  671,524   815,197   1,354,084   1,708,689 

Retail Properties:

                

Rental, fees and other income

  471,344   683,324   1,224,685   1,465,495 

Property and related expenses

  (145,951)  (193,117)  (358,538)  (427,483)

Net operating income, as defined

  325,393   490,207   866,147   1,038,012 

Reconciliation to net loss:

                

Total net operating income, as defined, for reportable segments

  2,972,777   3,360,768   5,962,445   6,890,599 

General and administrative expenses

  (1,214,005)  (1,344,770)  (2,797,696)  (2,882,036)

Depreciation and amortization

  (1,316,193)  (1,368,209)  (2,655,418)  (2,797,143)

Interest expense

  (1,085,860)  (1,207,036)  (2,103,573)  (2,791,430)

Gain on extinguishment of government debt

  —   —   —   10,000 

Other income (expense), net

  93,128   (20,657)  166,733   (53,443)

Income tax expense

  (259,285)  (238,701)  (524,524)  (288,899)

Gain (loss) on sale of real estate

  1,227,484   2,594,341   2,750,269   1,433,014 

Net income (loss)

 $418,046  $1,775,736  $798,236  $(479,338)

 

  

June 30,

  

December 31,

 

Assets by Reportable Segment:

 

2022

  

2021

 

Office/Industrial Properties:

        

Land, buildings and improvements, net (1)

 $77,224,583  $78,240,086 

Total assets (2)

 $78,900,054  $76,453,436 

Model Home Properties:

        

Land, buildings and improvements, net (1)

 $32,009,456  $34,089,046 

Total assets (2)

 $30,652,005  $31,047,202 

Retail Properties:

        

Land, buildings and improvements, net (1)

 $16,227,501  $25,693,239 

Total assets (2)

 $16,909,932  $27,579,469 

Reconciliation to Total Assets:

        

Total assets for reportable segments

 $126,461,991  $135,080,107 

Other unallocated assets:

        

Cash, cash equivalents and restricted cash

  12,154,873   6,738,345 

Other assets, net

  150,479,259   19,378,311 

Total Assets

 $289,096,123  $161,196,763 

 

(1)

Includes lease intangibles and the land purchase option related to property acquisitions.

 

(2)

Includes land, buildings and improvements, cash, cash equivalents, and restricted cash, current receivables, deferred rent receivables and deferred leasing costs and other related intangible assets, all shown on a net basis.

 

  

For the Six Months Ended June 30,

 

Capital Expenditures by Reportable Segment

 

2022

  

2021

 

Office/Industrial Properties:

        

Capital expenditures and tenant improvements

 $832,990  $289,685 

Model Home Properties:

        

Acquisition of operating properties

  4,646,330   2,851,800 

Retail Properties:

        

Acquisition of operating properties

  —   — 

Capital expenditures and tenant improvements

  —   42,823 

Totals:

        

Acquisition of operating properties, net

  4,646,330   2,851,800 

Capital expenditures and tenant improvements

  832,990   332,508 

Total real estate investments

 $5,479,320  $3,184,308