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Note 12 - Segments
 6 Months Ended
Jun. 30, 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 and six months ended June 30, 2023, and June 30, 2022:

 

   

Three Months Ended June 30,

    

Six Months Ended June 30,

  
   

2023

    

2022

    

2023

    

2022

  

Office/Industrial Properties:

                                

Rental, fees and other income

   $ 3,020,066     $ 3,150,251     $ 5,882,064     $ 6,273,139  

Property and related expenses

     (1,202,243 )     (1,174,391 )     (2,662,932 )     (2,530,925 )

Net operating income, as defined

     1,817,823       1,975,860       3,219,132       3,742,214  

Model Home Properties:

                                

Rental, fees and other income

     1,022,041       696,964       1,877,161       1,407,292  

Property and related expenses

     (46,801 )     (25,440 )     (77,797 )     (53,208 )

Net operating income, as defined

     975,240       671,524       1,799,364       1,354,084  

Retail Properties:

                                

Rental, fees and other income

     480,001       471,344       938,868       1,224,685  

Property and related expenses

     (128,351 )     (145,951 )     (266,149 )     (358,538 )

Net operating income, as defined

     351,650       325,393       672,719       866,147  

Reconciliation to net income (loss):

                                

Total net operating income, as defined, for reportable segments

     3,144,713       2,972,777       5,691,215       5,962,445  

General and administrative expenses

     (1,813,184 )     (1,214,005 )     (3,777,804 )     (2,797,696 )

Depreciation and amortization

     (1,368,829 )     (1,316,193 )     (2,702,403 )     (2,655,418 )

Interest expense

     (1,336,415 )     (1,085,860 )     (2,204,182 )     (2,103,573 )

Other income (expense), net

     398,085       93,128       1,140,201       166,733  

Income tax expense

     (349,074 )     (259,285 )     (497,527 )     (524,524 )

Gain on sale of real estate

     1,119,952       1,227,484       1,537,289       2,750,269  

Net income (loss)

   $ (204,752 )   $ 418,046     $ (813,211 )   $ 798,236  

   

   

June 30,

    

December 31,

  

Assets by Reportable Segment:

  

2023

    

2022

  

Office/Industrial Properties:

                

Land, buildings and improvements, net (1)

   $ 75,552,573     $ 76,400,983  

Total assets (2)

   $ 76,832,793     $ 79,057,998  

Model Home Properties:

                

Land, buildings and improvements, net (1)

   $ 47,267,669     $ 37,933,824  

Total assets (2)

   $ 45,944,301     $ 35,274,545  

Retail Properties:

                

Land, buildings and improvements, net (1)

   $ 16,035,143     $ 16,142,613  

Total assets (2)

   $ 16,698,766     $ 16,810,627  

Reconciliation to Total Assets:

                

Total assets for reportable segments

   $ 139,475,860     $ 131,143,170  

Other unallocated assets:

                

Cash, cash equivalents and restricted cash

     2,570,236       8,570,121  

Other assets, net

     37,005,592       151,638,363  

Total Assets

   $ 179,051,688     $ 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 Six Months Ended June 30,

  

Capital Expenditures by Reportable Segment

  

2023

    

2022

  

Office/Industrial Properties:

                

Capital expenditures and tenant improvements

   $ 905,132     $ 832,990  

Model Home Properties:

                

Acquisition of operating properties

     12,932,128       4,646,330  

Retail Properties:

                

Acquisition of operating properties

     —       —  

Capital expenditures and tenant improvements

     96,704       —  

Totals:

                

Acquisition of operating properties, net

     12,932,128       4,646,330  

Capital expenditures and tenant improvements

     1,001,836       832,990  

Total real estate investments

   $ 13,933,964     $ 5,479,320