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Mortgage Loans | 3 Months Ended
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Mar. 31, 2025
Debt Disclosure [Abstract] |
Mortgage Loans | Note 8 – Mortgage Loans The Company had the following mortgage loans outstanding as of March 31, 2025 and December 31, 2024, respectively:
Occupying Tenant | Location | Original Loan Amount |  |  | Interest Rate |  | Maturity Date | 3/31/2025 |  | 12/31/2024 |  | Debt Service Coverage Ratios ("DSCR") Required
7-Eleven Corporation, Starbucks Corporation & Auburn University | Washington, D.C., Tampa, FL, and Huntsville, AL | $ | 11,287,500 |  | (a) | 4.17% |  | 3/6/2030 | $ | 10,602,711 |  | $ | 10,602,711 |  | 1.25
General Services Administration-Navy & AYMCA | Norfolk, VA |  | 8,260,000 |  | (f) | 6.15% |  | 8/30/2029 |  | 7,070,667 |  |  | 7,119,184 |  | 1.25
PRA Holdings, Inc. | Norfolk, VA |  | 5,216,749 |  | (f) | 6.15% |  | 8/23/2029 |  | 4,380,897 |  |  | 4,410,949 |  | 1.25
Sherwin Williams Company | Tampa, FL |  | 1,286,664 |  |  | 3.72% | (b) | 8/10/2028 |  | 1,246,821 |  |  | 1,255,068 |  | 1.20
General Services Administration-FBI | Manteo, NC |  | 928,728 |  | (c) | 3.85% | (d) | 3/31/2032 |  | 885,068 |  |  | 891,071 |  | 1.50
Irby Construction | Plant City , FL |  | 928,728 |  | (c) | 3.85% | (d) | 3/31/2032 |  | 885,068 |  |  | 891,071 |  | 1.50
La-Z-Boy Inc. | Rockford, IL |  | 2,100,000 |  |  | 3.85% | (d) | 3/31/2032 |  | 2,001,273 |  |  | 2,014,851 |  | 1.50
Best Buy Co., Inc. | Grand Junction, CO |  | 2,552,644 |  | (c) | 3.85% | (d) | 3/31/2032 |  | 2,432,644 |  |  | 2,449,141 |  | 1.50
Fresenius Medical Care Holdings, Inc. | Chicago, IL |  | 1,727,108 |  | (c) | 3.85% | (d) | 3/31/2032 |  | 1,645,916 |  |  | 1,657,079 |  | 1.50
Starbucks Corporation | Tampa, FL |  | 1,298,047 |  | (c) | 3.85% | (d) | 3/31/2032 |  | 1,237,025 |  |  | 1,245,414 |  | 1.50
Kohl's Corporation | Tucson, AZ |  | 3,964,745 |  | (c) | 3.85% | (d) | 3/31/2032 |  | 3,778,361 |  |  | 3,803,985 |  | 1.50
City of San Antonio (PreK) | San Antonio, TX |  | 6,444,000 |  | (e) | 7.47% | (b) | 8/10/2028 |  | 6,297,705 |  |  | 6,323,628 |  | 1.50
Dollar General Market | Bakersfield, CA |  | 2,428,000 |  | (e) | 7.47% | (b) | 8/10/2028 |  | 2,372,878 |  |  | 2,382,646 |  | 1.50
Dollar General | Big Spring, TX |  | 635,000 |  | (e) | 7.47% | (b) | 8/10/2028 |  | 620,584 |  |  | 623,138 |  | 1.50
Dollar General | Castalia, OH |  | 556,000 |  | (e) | 7.47% | (b) | 8/10/2028 |  | 543,377 |  |  | 545,614 |  | 1.50
Dollar General | East Wilton, ME |  | 726,000 |  | (e) | 7.47% | (b) | 8/10/2028 |  | 709,518 |  |  | 712,439 |  | 1.50
Dollar General | Lakeside, OH |  | 567,000 |  | (e) | 7.47% | (b) | 8/10/2028 |  | 554,128 |  |  | 556,409 |  | 1.50
Dollar General | Litchfield, ME |  | 624,000 |  | (e) | 7.47% | (b) | 8/10/2028 |  | 609,834 |  |  | 612,344 |  | 1.50
Dollar General | Mount Gilead, OH |  | 533,000 |  | (e) | 7.47% | (b) | 8/10/2028 |  | 520,900 |  |  | 523,044 |  | 1.50
Dollar General | Thompsontown, PA |  | 556,000 |  | (e) | 7.47% | (b) | 8/10/2028 |  | 543,377 |  |  | 545,614 |  | 1.50
Dollar Tree Stores, Inc. | Morrow, GA |  | 647,000 |  | (e) | 7.47% | (b) | 8/10/2028 |  | 632,312 |  |  | 634,914 |  | 1.50
exp U.S. Services Inc. | Maitland, FL |  | 2,950,000 |  | (e) | 7.47% | (b) | 8/10/2028 |  | 2,883,028 |  |  | 2,894,895 |  | 1.50
General Services Administration | Vacaville, CA |  | 1,293,000 |  | (e) | 7.47% | (b) | 8/10/2028 |  | 1,263,646 |  |  | 1,268,847 |  | 1.50
Walgreens | Santa Maria, CA |  | 3,041,000 |  | (e) | 7.47% | (b) | 8/10/2028 |  | 2,971,962 |  |  | 2,984,195 |  | 1.50
Best Buy Co., Inc. | Ames, IA |  | 2,495,000 |  |  | 6.29% | (b) | 8/23/2029 |  | 2,495,000 |  |  | 2,495,000 |  | 1.50
Zaxby's | Sanford, FL |  | 2,947,000 |  |  | 6.29% |  | 5/14/2026 |  | 2,507,448 |  | n/a |  | 1.30
Dollar General | Cleveland, TN |  | 1,350,000 |  |  | 3.50% |  | 5/14/2026 |  | 1,246,390 |  | n/a |  | 1.25
Tractor Supply | Kernersville, NC |  | 3,507,000 |  |  | 2.90% |  | 10/22/2031 |  | 3,245,489 |  | n/a |  | 1.20
|  |  | 70,849,913 |  |  |  |  |  |  | 66,184,027 |  |  | 59,443,251 |  |
|  |  |  |  |  |  | Less Debt Discount, net |  | (826,271 | ) |  | (317,978 | ) |
|  |  |  |  |  |  | Less Debt Issuance Costs, net |  | (742,825 | ) |  | (785,358 | ) |
|  |  |  | 64,614,931 |  |  | 58,339,915 |  |
(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% (e) One loan in the amount of $21.0 million secured by 13 properties and allocated to each property based on each property's appraised value. The Company amortized debt issuance costs and debt discount during the three months ended March 31, 2025 and 2024 to interest expense of approximately $42,533 and $47,780, respectively. The Company did no t pay any debt issuance costs during the three months ended March 31, 2025 and 2024. Each mortgage loan requires the Company to maintain certain debt service coverage ratios as noted above. In addition, two mortgage loans, one encumbered by six properties and requiring a 1.50 DSCR, and another stand alone mortgage loan requiring a 1.50 DSCR, require 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, 2025,the Company was in compliance with all covenants, with the exception of one project level debt service coverage ratio ("DSCR") covenant for PNC for 15091 SW Alabama 20, LLC. In January 2024, Pratt and Whitney Automation vacated the property at the end of their lease and the property remained vacant for six months, thereafter. In August 2024, the Company entered into a lease with Auburn University for approximately 50 percent of the property's leasable space. During the six months of physical and economic vacancy, the property's mortgage DSCR was below the required 1.25 threshold resulting in a covenant deviation. According to the governing loan documents, failing to meet DSCR coverage requirements is a technical default triggering the risk of forfeiture of the property, accelerating the repayment of the remaining outstanding balance of the loan at the lender's discretion. On April 1, 2022, the Company entered into two mortgage loan agreements with an aggregate balance of $13.5 million 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 previously held in the tenancy-in-common investment at an interest rate of 3.85% from April 1, 2022 through and until March 31, 2027. In conjunction with the LC2 Investment to purchase the remaining interest in the tenancy-in-common interest discussed above, the Company assumed the original $2.1 million loan on the property with a remaining balance of $2,079,178 and recognized a discount of $383,767. 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. On August 10, 2023, GIP13, LLC, a Delaware limited liability company and wholly owned subsidiary of GIP SPE ("GIP Borrower"), entered into a Loan Agreement with Valley Bank pursuant to which Valley Bank made a loan to the Company in the amount of $21.0 million to finance the acquisition of the Modiv Portfolio. The outstanding principal amount of the loan bears interest at an annual rate for each 30-day interest period equal to the compounded average of the secured overnight financing rate published by Federal Reserve Bank of New York for the thirty-day period prior to the last day of each 30-day interest rate for the applicable interest rate period plus 3.25%, with interest payable monthly after each 30-day interest period. However, the Company entered into an interest rate swap to fix the interest rate at 7.47% per annum. Payments of interest and principal in the amount of approximately $156,000 are due and payable monthly, with all remaining principal and accrued but unpaid interest due and payable on a maturity date of August 10, 2028. The loan may generally be prepaid at any time without penalty in whole or in part, provided that there is no return of loan fees and prepaid financing fees. The loan is secured by first mortgages and assignments of rents in the properties comprising the Modiv Portfolio and eight other properties held by subsidiaries of GIP SPE that had outstanding loans with Valley. All of the mortgaged properties cross collateralize the loan, and the loan is guaranteed by the Operating Partnership and the subsidiaries of the Company that hold the properties that comprise the Modiv Portfolio. The loan agreement also provides for customary events of default and other customary affirmative and negative covenants that are applicable to GIP Borrower and its subsidiaries, including reporting covenants and restrictions on investments, additional indebtedness, liens, sales of properties, certain mergers, and certain management changes. The Company's President and CEO entered into a personal, full recourse guarantee with a $7,500,000 cap and has also personally guaranteed the repayment of the $10.6 million due under the 7-11 - Washington, DC; Starbucks - South Tampa, FL; vacant - 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 provided a guaranty of the Company’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 $11.5 million. During the three months ended March 31, 2025 and 2024, the Company incurred a guaranty fee expense to the Company's CEO of $97,692 and $97,898, respectively, recorded to interest expense. As of March 31, 2025 the Company recorded $292,036 for guaranty fees payable which is included in accrued expenses. 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 has paid the note in full as of December 31, 2024. Remaining balances of $0 and $1,357,380 were outstanding as of March 31, 2025 and March 31, 2024, respectively. 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. On July 21, 2023, the Company amended and restated the promissory note to reflect an increase in the loan to $5.5 million and extend the maturity date thereof from October 14, 2024 to October 14, 2026. Except for the increase in the amount of the Loan and Note and the extension of the maturity date thereof, no changes were made to the original note. Minimum 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, 2025 |
2025 | $ | 1,138,148 |  |  | - |  |  | - |  |  | 1,138,148 |
2026 |  | 5,110,416 |  |  | - |  |  | 5,500,000 |  |  | 10,610,416 |
2027 |  | 1,508,613 |  |  | - |  |  | - |  |  | 1,508,613 |
2028 |  | 21,846,023 |  |  | - |  |  | - |  |  | 21,846,023 |
2029 |  | 13,311,313 |  |  | - |  |  | - |  |  | 13,311,313 |
Thereafter |  | 23,269,514 |  |  | - |  |  | - |  |  | 23,269,514 |
| $ | 66,184,027 |  | $ | - |  | $ | 5,500,000 |  | $ | 71,684,027 |

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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://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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