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Note 12 - Segments
 3 Months Ended
Mar. 31, 2023
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 months ended March 31, 2023 and March 31, 2022:

 

  

Three Months Ended March 31,

 
  

2023

  

2022

 

Office/Industrial Properties:

        

Rental, fees and other income

 $2,861,998  $3,122,888 

Property and related expenses

  (1,460,690)  (1,356,534)

Net operating income, as defined

  1,401,308   1,766,354 

Model Home Properties:

        

Rental, fees and other income

  855,120   710,328 

Property and related expenses

  (30,996)  (27,768)

Net operating income, as defined

  824,124   682,560 

Retail Properties:

        

Rental, fees and other income

  458,867   753,341 

Property and related expenses

  (137,798)  (212,587)

Net operating income, as defined

  321,069   540,754 

Reconciliation to net income (loss):

        

Total net operating income, as defined, for reportable segments

  2,546,501   2,989,668 

General and administrative expenses

  (1,964,620)  (1,583,691)

Depreciation and amortization

  (1,333,574)  (1,339,225)

Interest expense

  (867,767)  (1,017,713)

Other income (expense), net

  742,117   73,605 

Income tax expense

  (148,453)  (265,239)

Gain on sale of real estate

  417,337   1,522,785 

Net income (loss)

 $(608,459) $380,190 

 

  

March 31,

  

December 31,

 

Assets by Reportable Segment:

 

2023

  

2022

 

Office/Industrial Properties:

        

Land, buildings and improvements, net (1)

 $76,116,400  $76,400,983 

Total assets (2)

 $76,869,980  $79,057,998 

Model Home Properties:

        

Land, buildings and improvements, net (1)

 $41,682,418  $37,933,824 

Total assets (2)

 $39,449,936  $35,274,545 

Retail Properties:

        

Land, buildings and improvements, net (1)

 $16,042,219  $16,142,613 

Total assets (2)

 $16,746,992  $16,810,627 

Reconciliation to Total Assets:

        

Total assets for reportable segments

 $133,066,908  $131,143,170 

Other unallocated assets:

        

Cash, cash equivalents and restricted cash

  5,955,178   8,570,121 

Other assets, net

  37,952,342   151,638,363 

Total Assets

 $176,974,428  $291,351,654 

 

(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 Three Months Ended March 31,

 

Capital Expenditures by Reportable Segment

 

2023

  

2022

 

Office/Industrial Properties:

        

Capital expenditures and tenant improvements

 $597,873  $319,737 

Model Home Properties:

        

Acquisition of operating properties

  5,039,455   2,427,890 

Retail Properties:

        

Acquisition of operating properties

  —   — 

Capital expenditures and tenant improvements

  —   — 

Totals:

        

Acquisition of operating properties, net

  5,039,455   2,427,890 

Capital expenditures and tenant improvements

  597,873   319,737 

Total real estate investments

 $5,637,328  $2,747,627