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Mortgage Loans | 3 Months Ended
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Mar. 31, 2023
Debt Disclosure [Abstract] |
Mortgage Loans | Note 9 – Mortgage Loans The Company had the following mortgage loans outstanding as of March 31, 2023 and December 31, 2022, respectively:
Mortgage Loans Secured By (Tenant-Location) | Loan Amount |  |  | Interest Rate |  |  | Maturity Date | 2023 |  | 2022 |  | Debt Service Coverage Ratios ("DSCR") Required |
7-11 - Washington, DC; Starbucks-South Tampa, FL; and Pratt & Whitney-Huntsville, Alabama | $ | 11,287,500 |  | (a) |  | 4.17 | % |  | 3/6/2030 | $ | 10,906,937 |  | $ | 10,957,829 |  |  | 1.25 |
GSA - Norfolk, Virginia |  | 8,260,000 |  |  |  | 3.50 | % |  | 9/30/2024 |  | 7,518,613 |  |  | 7,578,304 |  |  | 1.25 |
PRA Holdings, Inc. - Norfolk, Virginia |  | 5,216,749 |  |  |  | 3.50 | % |  | 10/23/2024 |  | 4,687,418 |  |  | 4,728,462 |  |  | 1.25 |
Sherwin-Williams - Tampa, Florida |  | 1,286,664 |  |  |  | 3.72 | % | (b) | 8/10/2028 |  | 1,286,664 |  |  | 1,286,664 |  |  | 1.20 |
GSA - Manteo, North Carolina |  | 928,728 |  | (c) |  | 3.85 | % | (d) | 3/31/2032 |  | 928,728 |  |  | 928,728 |  |  | 1.50 |
Irby Construction - Plant City , Florida |  | 928,728 |  | (c) |  | 3.85 | % | (d) | 3/31/2032 |  | 928,728 |  |  | 928,728 |  |  | 1.50 |
Best Buy - Grand Junction, Colorado |  | 2,552,644 |  | (c) |  | 3.85 | % | (d) | 3/31/2032 |  | 2,552,644 |  |  | 2,552,644 |  |  | 1.50 |
Fresenius - Chicago, Illinois |  | 1,727,108 |  | (c) |  | 3.85 | % | (d) | 3/31/2032 |  | 1,727,108 |  |  | 1,727,108 |  |  | 1.50 |
Starbucks - North Tampa, Florida |  | 1,298,047 |  | (c) |  | 3.85 | % | (d) | 3/31/2032 |  | 1,298,047 |  |  | 1,298,047 |  |  | 1.50 |
Kohls - Tucson, Arizona |  | 3,964,745 |  | (c) |  | 3.85 | % | (d) | 3/31/2032 |  | 3,964,745 |  |  | 3,964,745 |  |  | 1.50 |
| $ | 37,450,913 |  |  |  |  |  |  | $ | 35,799,632 |  | $ | 35,951,259 |  |  |
Less Debt Issuance Costs, net |  | (688,516 | ) |  | (717,381 | ) |  |
|  |  |  |  |  |  |  | $ | 35,111,116 |  | $ | 35,233,878 |  |  |
(a) Loan subject to prepayment penalty (b) Fixed via interest rate swap (c) One loan in the amount of $11.4 million secured by six properties and allocated to each property based on each property's appraised value. (d) Adjustment effective April 1, 2027 equal to 5-year Treasury plus 2.5% and subject to a floor of 3.85% The Company amortized debt issuance costs during the three months ended March 31, 2023 and 2022 to interest expense of approximately $28,865 and $33,673, respectively. The Company did no t pay any debt issuance costs during the three months ended March 31, 2023 and paid $78,878 during the three months ended March 31, 2022. Each mortgage loan requires the Company to maintain certain debt service coverage ratios as noted above. In addition, one mortgage loan encumbered by six properties, requires the Company to maintain a 54% loan to fair market stabilized value ratio. Fair market stabilized value shall be determined by the lender by reference to acceptable guides and indices or appraisals from time to time at its discretion. As of March 31, 2023, the Company was in compliance with all covenants. On April 1, 2022, the Company entered into two mortgage loan agreements with an aggregate balance of $13.5 million as of March 31, 2023 to refinance seven of the Company's properties. The loan agreements consist of one loan in the amount of $11.4 million secured by six properties and allocated to each property based on each property's appraised value, and one loan in the amount of $2.1 million on the property held in the tenancy-in-common investment at an interest rate of 3.85% from April 1, 2022 through and until March 31, 2027. Effective April 1, 2027 and through the maturity date of March 31, 2032, the interest rate adjusts to the 5-year Treasury plus 2.5% and is subject to a floor of 3.85%. The Company’s CEO entered into a guarantee agreement pursuant to which he guaranteed the payment obligations under the promissory notes if they become due as a result of certain “bad-boy” provisions, individually and on behalf of the Operating Partnership. The Company’s President and CEO has personally guaranteed the repayment of the $11.0 million due under the 7-11 - Washington, DC; Starbucks-South Tampa, FL; and Pratt & Whitney-Huntsville, AL loan as well as the $1.3 million loan secured by the Company's Sherwin-Williams - Tampa, FL property. In addition, the Company’s President and CEO has also provided a guaranty of the Borrower’s nonrecourse carveout liabilities and obligations in favor of the lender for the GSA and PRA Holdings, Inc. - Norfolk, VA mortgage loans ("Bayport loans") with an aggregate principal amount of $12,206,031. During the three months ended March 31, 2023, the Company incurred a guarantee fee expense to the Company's CEO of $60,493 recorded to interest expense. No guaranty fee expense was incurred during the three months ended March 31, 2022. On May 9, 2022, the Operating Partnership amended the current Commitment Letter with American Momentum Bank (the “Lender”), by entering into a new commitment letter, to increase the available borrowings under the Facility from $25.0 million to $50.0 million to be used for the acquisition of income producing real estate properties under the same terms as provided by the agreement entered into on October 26, 2021. The new Commitment Letter will become effective contingent upon the Company completing a future capital raise of $25.0 million or more, and prior to such time, the current Commitment Letter will remain in place. On September 9, 2022, the Company and AMB combined the prior AMB commitment letters entered into in October 2021 and May 2022 into a single Commitment Letter, and have amended the rate index used for borrowing to be a variable rate equal to the 30-Day CME Term SOFR Rate, plus a margin of 2.40%, adjusted monthly, subject to a floor interest rate of 3.25% per year. All other terms under the prior commitment letters remained materially the same. As of March 31, 2023 and December 31, 2022, the Company did not have an outstanding balance on the Facility. On August 9, 2022 the Company and Operating Partnership entered a Redemption Agreement with a unit holder. As such, the Company recorded an other payable - related party in the amount of $2,912,300 upon execution of the Redemption Agreement entered into July 20, 2022 and made the first and second installment payments of $325,000 each on September 13, 2022 and March 8, 2023, respectively, with a remaining balance of $2,262,300 outstanding as of March 31, 2023. On October 14, 2022, the Company entered into a loan transaction that is evidenced by a secured non-convertible promissory note to Brown Family Enterprises, LLC, a preferred equity partner and therefore a related party, for $1,500,000 that is due on October 14, 2024, and bears a fixed interest rate of 9%, simple interest. Interest is payable monthly. The loan may be repaid without penalty at any time. The loan is secured by the Operating Partnership’s equity interest in its current direct subsidiaries that hold real estate assets pursuant to the terms of a security agreement between the Operating Partnership and Brown Family Enterprises, LLC. M inimum required principal payments on the Company’s debt for subsequent years ending December 31 are as follows:
| Mortgage Loans |  |  | Other Payable - Related Party |  |  | Loan Payable - Related Party |  | Total as of March 31, 2023 |
2023 (9 months remaining) | $ | 633,897 |  |  | $ | 452,460 |  |  | $ | - |  | $ | 1,086,357 |
2024 |  | 12,427,090 |  |  |  | 1,809,840 |  |  |  | 1,500,000 |  |  | 15,736,930 |
2025 |  | 546,280 |  |  |  | - |  |  |  | - |  |  | 546,280 |
2026 |  | 568,514 |  |  |  | - |  |  |  | - |  |  | 568,514 |
2027 |  | 591,656 |  |  |  | - |  |  |  | - |  |  | 591,656 |
Thereafter |  | 21,032,195 |  |  |  | - |  |  |  | - |  |  | 21,032,195 |
| $ | 35,799,632 |  |  | $ | 2,262,300 |  |  | $ | 1,500,000 |  | $ | 39,561,932 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI https://asc.fasb.org/topic&trid=2208564 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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