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SEGMENTS
 9 Months Ended 12 Months Ended
Sep. 30, 2021
Dec. 31, 2020
Segment Reporting [Abstract]    
SEGMENTS

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, 2021 and September 30, 2020:

 

   2021   2020   2021   2020 
   Three Months Ended September 30,   For the Nine Months Ended September 30, 
   2021   2020   2021   2020 
Office/Industrial Properties:                    
Rental, fees and other income  $2,888,361   $4,098,892   $10,149,013   $13,334,595 
Property and related expenses   (1,171,387)   (1,813,950)   (4,288,142)   (5,539,320)
Net operating income, as defined   1,716,974    2,284,942    5,860,871    7,795,275 
Model Home Properties:                    
Rental, fees and other income   739,558    1,058,329    2,528,748    3,268,074 
Property and related expenses   (25,804)   (58,897)   (106,304)   (160,688)
Net operating income, as defined   713,754    999,432    2,422,444    3,107,386 
Retail Properties:                    
Rental, fees and other income   748,312    548,392    2,213,808    2,305,412 
Property and related expenses   (217,379)   (277,820)   (644,862)   (1,729,171)
Net operating (loss) income, as defined   530,933    270,572    1,568,946    576,241 
Reconciliation to net loss:                    
Total net operating income, as defined, for reportable segments   2,961,661    3,554,946    9,852,261    11,478,902 
General and administrative expenses   (1,479,261)   (1,366,380)   (4,361,297)   (3,996,696)
Depreciation and amortization   (1,306,874)   (1,626,917)   (4,104,018)   (4,823,673)
Interest expense   (1,030,883)   (2,143,960)   (3,822,313)   (6,971,162)
Gain on extinguishment of government debt   —    —    10,000    — 
Other income (expense), net   (13,886)   (12,270)   (67,329)   (10,865)
Income tax expense   (182,607)   (122,602)   (471,506)   (257,602)
Gain (loss) on sale of real estate   627,322    332,715    2,060,336    656,975 
Net income (loss)  $(424,528)  $(1,384,468)  $(903,866)  $(3,924,121)

 

SCHEDULE OF ASSETS BY REPORTABLE SEGMENT 

   September 30,   December 31, 
Assets by Reportable Segment:  2021   2020 
Office/Industrial Properties:          
Land, buildings and improvements, net (1)  $70,110,480   $99,120,649 
Total assets (2)  $67,689,503   $100,046,782 
Model Home Properties:          
Land, buildings and improvements, net (1)  $29,954,760   $42,509,596 
Total assets (2)  $28,972,715   $42,246,022 
Retail Properties:          
Land, buildings and improvements, net (1)  $25,774,657   $24,555,371 
Total assets (2)  $27,471,065   $26,108,109 
Reconciliation to Total Assets:          
Total assets for reportable segments  $124,133,283   $168,400,913 
Other unallocated assets:          
Cash, cash equivalents and restricted cash   19,428,488    2,149,088 
Other assets, net   18,272,856    15,018,615 
Total Assets  $161,834,627   $185,568,616 

 

(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.

 

Capital Expenditures by Reportable Segment  2021   2020 
  

For the Nine Months Ended

September 30,

 
Capital Expenditures by Reportable Segment  2021   2020 
Office/Industrial Properties:          
Capital expenditures and tenant improvements  $1,054,202   $2,501,075 
Model Home Properties:          
Acquisition of operating properties   2,851,800    8,996,248 
Retail Properties:          
Acquisition of operating properties   4,906,266      
Capital expenditures and tenant improvements   67,849    9,077 
Totals:          
Acquisition of operating properties, net   7,758,066    8,996,248 
Capital expenditures and tenant improvements   1,122,051    2,510,152 
Total real estate investments  $8,880,117   $11,506,400 

 

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.

   2020   2019 
   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.

 

SCHEDULE OF CAPITAL EXPENDITURES BY REPORTABLE SEGMENT

   September 30,   December 31, 
   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