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Note 12 - Segments
 9 Months Ended
Sep. 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 nine months ended September 30, 2022 and September 30, 2021:

 

   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2022

    

2021

    

2022

    

2021

  

Office/Industrial Properties:

                                

Rental, fees and other income

   $ 3,175,608     $ 2,888,361     $ 9,448,747     $ 10,149,013  

Property and related expenses

     (1,278,805 )     (1,171,387 )     (3,809,729 )     (4,288,142 )

Net operating income, as defined

     1,896,803       1,716,974       5,639,018       5,860,871  

Model Home Properties:

                                

Rental, fees and other income

     718,331       739,558       2,125,623       2,528,748  

Property and related expenses

     (23,479 )     (25,804 )     (76,687 )     (106,304 )

Net operating income, as defined

     694,852       713,754       2,048,936       2,422,444  

Retail Properties:

                                

Rental, fees and other income

     498,038       748,312       1,722,723       2,213,808  

Property and related expenses

     (131,943 )     (217,379 )     (490,481 )     (644,862 )

Net operating income, as defined

     366,095       530,933       1,232,242       1,568,946  

Reconciliation to net income (loss):

                                

Total net operating income, as defined, for reportable segments

     2,957,750       2,961,661       8,920,196       9,852,261  

General and administrative expenses

     (1,509,139 )     (1,479,261 )     (4,306,835 )     (4,361,297 )

Depreciation and amortization

     (1,318,164 )     (1,306,874 )     (3,973,582 )     (4,104,018 )

Interest expense

     (1,382,120 )     (1,030,883 )     (3,485,693 )     (3,822,313 )

Gain on extinguishment of government debt

     —       —       —       10,000  

Other income (expense), net

     590,586       (13,886 )     757,318       (67,329 )

Income tax expense

     (294,996 )     (182,607 )     (819,520 )     (471,506 )

Gain on sale of real estate

     1,307,258       627,322       4,057,527       2,060,336  

Net income (loss)

   $ 351,175     $ (424,528 )   $ 1,149,411     $ (903,866 )

 

   

September 30,

    

December 31,

  

Assets by Reportable Segment:

  

2022

    

2021

  

Office/Industrial Properties:

                

Land, buildings and improvements, net (1)

   $ 77,305,021     $ 78,240,086  

Total assets (2)

   $ 79,625,203     $ 76,453,436  

Model Home Properties:

                

Land, buildings and improvements, net (1)

   $ 33,214,543     $ 34,089,046  

Total assets (2)

   $ 31,237,396     $ 31,047,202  

Retail Properties:

                

Land, buildings and improvements, net (1)

   $ 16,237,143     $ 25,693,239  

Total assets (2)

   $ 16,857,792     $ 27,579,469  

Reconciliation to Total Assets:

                

Total assets for reportable segments

   $ 127,720,391     $ 135,080,107  

Other unallocated assets:

                

Cash, cash equivalents and restricted cash

     9,800,631       6,738,345  

Other assets, net

     151,101,776       19,378,311  

Total Assets

   $ 288,622,798     $ 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 Nine Months Ended September 30,

  

Capital Expenditures by Reportable Segment

  

2022

    

2021

  

Office/Industrial Properties:

                

Capital expenditures and tenant improvements

   $ 1,832,806     $ 1,054,202  

Model Home Properties:

                

Acquisition of operating properties

     8,087,250       2,851,800  

Retail Properties:

                

Acquisition of operating properties

     —       4,906,266  

Capital expenditures and tenant improvements

     106,906       67,849  

Totals:

                

Acquisition of operating properties, net

     8,087,250       7,758,066  

Capital expenditures and tenant improvements

     1,939,712       1,122,051  

Total real estate investments

   $ 10,026,962     $ 8,880,117