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Note 12 - Segments
 9 Months Ended
Sep. 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 nine months ended September 30, 2023, and September 30, 2022:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2023

  

2022

  

2023

  

2022

 

Office/Industrial Properties:

                

Rental, fees and other income

 $2,928,103  $3,175,608  $8,810,167  $9,448,747 

Property and related expenses

  (1,303,654)  (1,278,805)  (3,966,587)  (3,809,729)

Net operating income, as defined

  1,624,449   1,896,803   4,843,580   5,639,018 

Model Home Properties:

                

Rental, fees and other income

  1,093,778   718,331   2,970,940   2,125,623 

Property and related expenses

  (44,201)  (23,479)  (121,998)  (76,687)

Net operating income, as defined

  1,049,577   694,852   2,848,942   2,048,936 

Retail Properties:

                

Rental, fees and other income

  457,292   498,038   1,396,160   1,722,723 

Property and related expenses

  (125,623)  (131,943)  (391,772)  (490,481)

Net operating income, as defined

  331,669   366,095   1,004,388   1,232,242 

Reconciliation to net income:

                

Total net operating income, as defined, for reportable segments

  3,005,695   2,957,750   8,696,910   8,920,196 

General and administrative expenses

  (1,635,610)  (1,509,139)  (5,413,413)  (4,306,835)

Depreciation and amortization

  (1,351,705)  (1,318,164)  (4,054,109)  (3,973,582)

Interest expense

  (1,375,199)  (1,382,120)  (3,579,381)  (3,485,693)

Loss on Conduit marketable securities

  (17,682,154)  —   (17,682,154)  — 

Gain on deconsolidation of SPAC

  40,321,483   —   40,321,483   — 

Other income, net

  254,486   590,586   1,394,687   757,318 

Income tax expense

  (134,620)  (294,996)  (632,147)  (819,520)

Gain on sale of real estate

  757,285   1,307,258   2,294,574   4,057,527 

Net income

 $22,159,661  $351,175  $21,346,450  $1,149,411 

   

  

September 30,

  

December 31,

 

Assets by Reportable Segment:

 

2023

  

2022

 

Office/Industrial Properties:

        

Land, buildings and improvements, net (1)

 $76,477,337  $76,400,983 

Total assets (2)

 $77,334,728  $79,057,998 

Model Home Properties:

        

Land, buildings and improvements, net (1)

 $45,991,453  $37,933,824 

Total assets (2)

 $45,181,672  $35,274,545 

Retail Properties:

        

Land, buildings and improvements, net (1)

 $15,959,020  $16,142,613 

Total assets (2)

 $16,534,252  $16,810,627 

Reconciliation to Total Assets:

        

Total assets for reportable segments

 $139,050,652  $131,143,170 

Other unallocated assets:

        

Cash, cash equivalents and restricted cash

  2,380,691   8,570,121 

Other assets, net

  36,502,046   151,638,363 

Total Assets

 $177,933,389  $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 Nine Months Ended September 30,

 

Capital Expenditures by Reportable Segment

 

2023

  

2022

 

Office/Industrial Properties:

        

Capital expenditures and tenant improvements

 $2,691,721  $1,832,806 

Model Home Properties:

        

Acquisition of operating properties

  13,715,923   8,087,250 

Retail Properties:

        

Capital expenditures and tenant improvements

  126,065   106,906 

Totals:

        

Acquisition of operating properties, net

  13,715,923   8,087,250 

Capital expenditures and tenant improvements

  2,817,786   1,939,712 

Total real estate investments

 $16,533,709  $10,026,962