UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year endedSeptember 30 2018, 2021
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period ___________________ to ____________________
Commission File Number:001-33177
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
(Exact name ofregistrant as specified in its charter)
Maryland | 22-1897375 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
3499 Route 9 North, 101 Crawfords Corner Road, Suite 3-D, Freehold, 1405, Holmdel, NJ 0772807733
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code:732-577-9996732-577-9996
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock | MNR | New York Stock Exchange | ||
6.125% Series C Cumulative Redeemable Preferred Stock | MNR-PC | New York Stock Exchange |
Common Stock, $0.01 par value per share
6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 par value per share, $25 liquidation value per share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
[X] ☒ Yes [ ] ☐ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
[ ] ☐ Yes [X] ☒ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X] ☒ Yes [ ] ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [X] Yes [ ] No
☒ Yes ☐ No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |
Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). [ ]☐ Yes [X] ☒ No
The aggregate market value of the voting and non-voting common equity of the registrant held by non-affiliates of the registrant at March 31, 20182021 was approximately $1,138,940,000$1.7 billion (based on the $15.04$17.69 closing price per share of the registrant’s common stock on the New York Stock Exchange on March 29, 2018)31, 2021).
There were 91,587,713 shares of common stock outstanding as of November 15, 2018.1, 2021.
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General Development of the Business
In this 10-K, “we”, “us”, “our”, “MREIC” or “the Company”, refers to Monmouth Real Estate Investment Corporation, together with its predecessors and subsidiaries, unless the context requires otherwise.
We are a Maryland corporation that qualifies as a real estate investment trust (REIT) under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the Code). Our investment focus is to own well-located, modern, single tenant,single-tenant, industrial buildings, leased primarily to investment-grade tenants or their subsidiaries on long-term net leases. We were founded in 1968 and arehave been publicly owned since that time, making us one of the oldest public equity REITs in the world. We intend to maintain our qualification as a REIT in the future. As a REIT, with limited exceptions, we will not be taxed under Federal and certain state income tax laws at the corporate level on taxable income that we distribute to our shareholders. For special tax provisions applicable to REITs, refer to Sections 856-860 of the Code. We are subject to franchise taxes in several of the states in which we own properties.
In December 2017, as part of the Tax Cuts and Jobs Act of 2017 (the TCJA), Code Section 199A was added to the Code and became effective for tax years beginning after December 31, 2017 and before January 1, 2026. Under the TCJA, subject to certain income limitations, an individual taxpayer and estates and trusts may deduct 20% of the aggregate amount of qualified REIT dividends they receive from their taxable income. Qualified REIT dividends do not include any portion of a dividend received from a REIT that is classified as a capital gain dividend or qualified dividend income.
We were established in 1968 as a New Jersey Business Trust (NJBT). In 1990, the NJBT merged into a newly formed Delaware corporation. On May 15, 2003, we changed our state of incorporation from Delaware to Maryland by merging with and into a Maryland corporation.
Narrative As previously announced, on November 5, 2021, we entered into a definitive merger agreement with Industrial Logistics Properties Trust, a Maryland real estate investment trust (“ILPT”), under which, on the terms and subject to the conditions set forth in the merger agreement, ILPT will acquire us in an all-cash transaction, with our common stockholders receiving $21.00 in cash for each outstanding share of our common stock in connection with consummation of the transaction. ILPT’s acquisition of us is subject to obtaining the requisite approval of our common stockholders and the satisfaction of other customary closing conditions. Upon closing of the merger with ILPT, holders of our outstanding 6.125% Series C Cumulative Redeemable Preferred Stock (“Series C Preferred Stock”) will receive the amount of $25 per share plus any accrued and unpaid dividends. We plan to continue to pay our regular quarterly common stock dividend and our Series C Cumulative Redeemable Preferred Stock dividend for each full quarterly dividend period completed prior to the closing of the transaction. This transaction with ILPT represents the culmination of the publicly announced comprehensive strategic alternatives review processes conducted by our Board of Directors during 2021. Our Board re-initiated its strategic alternatives review process in September 2021 after a previous agreement for a merger that we entered into with another party, following a strategic alternatives review process earlier this year, did not receive the requisite approval of our stockholders.
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Description of Business
Our primary business is the ownership and management of industrial real estate.estate properties. Our investment focus is to own well-located, modern, single tenant,single-tenant, industrial buildings, leased primarily to investment-grade tenants or their subsidiaries on long-term net leases. In addition, we own a portfolio of REIT investment securities which we generally limit to no more than approximately 10% of our undepreciated assets (which is our total assets excluding accumulated depreciation).
As of September 30, 2018, we had 14 full-time employees and one part-time employee.
At September 30, 2018,2021, we held investments in 111122 properties totaling approximately 21,174,00024.9 million square feet with an overall occupancy rate of 99.6%99.7% (See Item 2 for a detailed description of the properties). As of the fiscal yearend, our weighted average lease expiration was 7.0 years, our annualized average base rent per occupied square foot was $6.61 and the weighted average building age, based on the square footage of our buildings, was 10.2 years. These properties are located in 3032 states: Alabama, Arizona, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington and Wisconsin. All of these properties are 100% owned by us, directly or through wholly-owned subsidiaries, with the exception of the two propertiesone property in New Jersey in which we own a majority interest. All of our investment properties which we have investments are leased on a net basis except for an industrial park in Monaca (Pittsburgh), Pennsylvania and theour only non-industrial asset, which is a shopping center, located in Somerset, New Jersey. Our investments are primarily located in strategic locations and, in many cases our buildings are highly automated in order to serve the omni-channel distribution networks that have become essential today. Approximately 83% of our revenue is derived from investment-grade tenants, or their subsidiaries as defined by S&P Global Ratings (www.standardandpoors.com) and by Moody’s (www.moodys.com). The references in this report to S&P Global Ratings and Moody’s are not intended to and do not include, or incorporate by reference into this report, the information of S&P Global Ratings or Moody’s on such websites.
Our portfolio of modern, net-leased industrial properties continues to provide shareholders with reliable and predictable income streams. Our resilient high occupancy rates and rent collection results highlight the mission-critical nature of our assets and underscore the essential need for our tenants’ operations. Furthermore, because our weighted average lease term is 7.0 years and our weighted average fixed rate mortgage debt maturity is 10.9 years, we expect our cash flow to remain resilient over long periods of time. Throughout the COVID-19 Pandemic, our overall occupancy rate has been over 99% and is currently 99.7%. Our base rent collections remained strong, averaging 99.9% throughout the COVID-19 Pandemic and we expect future months to be consistent with this trend.
US industrial real estate market conditions are as strong as they have ever been with record high asking rents, a robust development pipeline, and an all-time high occupancy rate of 96%. Companies are leasing space at record levels to handle the large increase in ecommerce sales as well as the need for safety stock to counter supply chain disruptions. Construction costs are rising dramatically due to the long lead times for sourcing materials. The amount of new construction for US industrial real estate has been increasing for several years as more industrial space is needed to handle direct-to-consumer distribution. It is estimated that ecommerce sales require three times the amount of warehouse space relative to brick and mortar retail sales. These new buildings are often highly automated and have much larger truck courts and parking requirements. Because modern industrial buildings are built to handle both wholesale distribution as well as direct to consumer distribution, they are known as omni-channel facilities. The West coast ports are continuing to experience severe bottlenecks in processing imports and as a result much container traffic is being diverted towards the Gulf and East coast ports. Given our geographic footprint, this trend is a very favorable one for us. For further discussion of potential impact of competitive conditions on our business, see Item 1A: Risk Factors below.
During fiscal 2018,2021, we purchased sevenfour industrial properties totaling approximately 2,655,0001.6 million square feet situated on 316.2 acres resulting in a very expansive land to building ratio of 8.8 to 1. All four properties are leased to investment-grade tenants or their subsidiaries, with net-leased terms ranging from 1015 to 1520 years, resulting in a weighted average lease maturity of 11.417.1 years. Approximately 2,255,000Three of the four properties, consisting of 903,000 square feet, or 85%58% of the total square footage of the four properties, purchased, are leased to investment-grade tenants or their subsidiaries, of which, approximately 761,000 square feet, or 29%, is leased to FedEx Corporation (FDX) or FedEx Ground Package System, Inc., a subsidiary of FDX.FedEx Corporation (FDX). The aggregate purchase price for the sevenfour properties was approximately $282,332,000.$258.4 million. These four properties are located in Alabama, Florida, Georgia, Oklahomathe following Metropolitan Statistical Areas (MSAs): Columbus, OH, Atlanta, GA, Burlington, VT and South Carolina.Knoxville, TN. These sevenfour properties are expected to generate annualized rental income over the life of their leases of approximately $17,414,000.$15.2 million. In connection with two of the sevenfour properties acquired during the 20182021 fiscal year, we entered into fourone 17 year, fully-amortizing mortgage loan and one 15 year, fully-amortizing mortgage loan. In connection with the remaining two properties acquired during the 2021 fiscal year, we entered into commitments for two, 15 year, fully-amortizing mortgage loans, two 14 yearwhich have not yet closed. These four fully-amortizing mortgage loans and one 10 year loan amortizing over 18have a weighted average term of 15.7 years. The sevenprincipal amount of the four mortgage loans originally totaled $175,160,000$161.8 million with an original weighted average mortgage loan maturity of 14.1 years andfixed interest rates ranging from 2.50% to 3.25%, resulting in a weighted average fixed interest rate of 3.91%2.89%.
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During fiscal 2021, we completed the first phase of a two-phase parking expansion project for FedEx Ground Package System, Inc. at our property located in Olathe (Kansas City), KS. The first phase of this parking expansion project was completed for a total cost of $3.4 million, resulting in an initial increase in annual rent effective November 5, 2020 of approximately $340,000 from approximately $2.1 million, or $6.83 per square foot, to approximately $2.5 million, or $7.91 per square foot. Furthermore, annual rent increased by 2.1% on June 1, 2021 and will continue to increase 2.1% every five years, resulting in an annualized rent from November 5, 2021 through the remaining term of the lease of approximately $2.6 million, or $8.15 per square foot. We recently began construction on the second phase of this parking expansion project at this location, which upon completion will further increase the rental rate and extend the lease term. In addition, effective June 4, 2021, we completed a parking lot expansion for UPS at our property located in Halfmoon (Albany), NY for a cost of approximately $835,000, resulting in an initial increase in annual rent effective on the date of completion of approximately $52,000 from approximately $510,000, or $6.80 per square foot, to approximately $562,000, or $7.50 per square foot. Furthermore, annual rent will continue to increase each year by 2.0% resulting in an annualized rent from June 4, 2021 through the remaining term of the lease of approximately $622,000, or $8.29 per square foot. Due to the proliferation of ecommerce sales and last mile deliveries, it is important to take into account the large amounts of real estate utilized for trailer, van, and car parking at many of our properties in determining how our in-place rental rates compare to market rental rates for properties being used in a similar manner. Rents per square foot on properties that may be nearby, but have only limited acreage devoted to parking, are poor comparisons as they cannot accommodate the same tenant needs.
Subsequent to fiscal yearend, on October 27, 2021, we purchased a newly constructed 291,000 square foot industrial building, situated on 46.0 acres, located in the Birmingham, AL MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through July 2036. The purchase price was $30.2 million. We obtained a mortgage loan commitment for a 15 year, fully-amortizing mortgage loan of $19.3 million at a fixed interest rate of 2.40%, which has not yet closed. Annual rental revenue over the remaining term of the lease averages $1.7 million.
In addition to the $30.2 million property purchased in October 2021, we have entered into agreements to purchase three new build-to-suit, industrial buildings that are currently being developed in Alabama, Georgia and Texas, totaling 1.1 million square feet. These future acquisitions have net-leased terms ranging from 10 to 15 years with a weighted average lease term of 12.6 years. The total purchase price for these three properties is $126.8 million. All three properties are leased to companies, or subsidiaries of companies, that are considered Investment Grade by S&P Global Ratings (www.standardandpoors.com) and by Moody’s (www.moodys.com). Two of these three properties, consisting of an aggregate of 563,000 square feet, or 52% of the total leasable area, are leased to FedEx Ground Package System, Inc. Subject to satisfactory due diligence and other customary closing conditions and requirements, we anticipate closing all three of these transactions during fiscal 2022.
We have several FedEx Ground parking expansion projects in progress with more under discussion. Currently there are nine parking expansion projects underway, which we expect to cost approximately $42.6 million. These parking expansion projects will enable us to capture additional rent while lengthening the terms of these leases. We are also in discussions to expand the parking at eight additional locations bringing the total recently completed and likely future parking lot expansion projects to 18 currently.
We may have additional acquisitions and expansions in fiscal 2022 and fiscal 2023, and the funds for these acquisitions are expected to come from funds generated from operations, mortgages, draws on our unsecured line of credit facility, cash on hand, sales of marketable securities, other bank borrowings, proceeds from the Dividend Reinvestment and Stock Purchase Plan (DRIP), proceeds from the sale of common stock in a possible future at-the-market public offering (similar to our previous common stock at-the-market offering) and proceeds from private placements and other public offerings of additional common or preferred stock or other securities. To the extent that funds or appropriate properties are not available, fewer acquisitions will be made.
On January 14, 2021, our Board of Directors approved a 5.9% increase in our quarterly common stock dividend, raising it to $0.18 per share from $0.17 per share representing an annualized dividend rate of $0.72 per share. This increase was the third dividend increase in the past five years, representing a total increase of 20%. We have maintained or increased our common stock cash dividend for 30 consecutive years. We are also one of the few REITs that maintained its dividend throughout the Global Financial Crisis.
On October 1, 2018,2021, our Board of Directors approved a cash dividend on our common stock of $0.17$0.18 per share, to be paid on December 17, 2018,15, 2021, to common shareholders of record at the close of business on November 15, 2018,2021, which represents an annualized common dividend rate of $0.68$0.72 per share. We intend to pay these distributions from cash flows from operations.
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We have maintained or increased our common stock cash dividend for 27 consecutive years. On October 1, 2015, our Board of Directors approved an increase in our quarterly common stock cash dividend from $0.15 per share to $0.16 per share representing a 6.7% increase in our quarterly cash dividend. Then again, most recently, on October 2, 2017, our Board of Directors approved an increase in our quarterly common stock cash dividend and from $0.16 per share to $0.17 per share on October 2, 2017, representing a 6.3% increase in our quarterly cash dividend. These two dividend raises represent a total increase of 13%.
Our common stock dividend policy is dependent upon our earnings, capital requirements, financial condition, availability and cost of bank financing and other factors considered relevant by the Board of Directors. It is our intention to continue making comparable quarterly distributions in the future and to grow our distributions over time.
Subsequent to fiscal yearend, on October 19, 2018, we purchased a newly constructed 347,145 square foot industrial building, situated on 62.0 acres, located in Trenton, NJ. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through June 2032. The purchase price was $85,248,352. We obtained a 15 year, fully-amortizing mortgage loan of $55,000,000 at a fixed interest rate of 4.13%. Annual rental revenue over the remaining term of the lease averages approximately $5,328,000.
The industrial property purchased thus far during fiscal 2019 increased our current total leasable square feet to approximately 21,521,000.
In addition to the property purchased subsequent to our fiscal yearend, as described above, we have entered into agreements to purchase two new build-to-suit, industrial buildings that are currently being developed in Georgia and North Carolina, consisting of approximately 398,000 square feet, with net-leased terms ranging from 10 to 15 years, with a weighted average lease term of 13.4 years. The purchase price for these properties is approximately $68,747,000 and both are leased to FedEx Ground Package System, Inc. Subject to satisfactory due diligence and other customary closing conditions and requirements, we anticipate closing these transactions during the first quarter of fiscal 2019 and fiscal 2020. In connection with one of these properties, we have entered into a commitment to obtain a 15 year, fully-amortizing mortgage loan of $17,500,000 with a fixed interest rate of 4.40%. We currently have one 154,800 square foot property expansion in progress at our property located in Monroe, OH which is expected to be completed in fiscal year 2019 for a total project cost of approximately $9,072,000. The expansion will result in a new 15 year lease which will extend the prior lease expiration date from February 2030 to January 2034. In addition, the expansion will result in an increase in initial annual rent effective from the date of completion by approximately $862,000 from approximately $961,000 to approximately $1,823,000. In addition, the annual rent will increase 2% per annum. We may have additional acquisitions and expansions in fiscal 2019 and fiscal 2020, and the funds for these acquisitions may come from funds generated from operations, mortgages, draws on our unsecured line of credit facility, cash on hand, sale of marketable securities, other bank borrowings, proceeds from the Dividend Reinvestment and Stock Purchase Plan (DRIP), proceeds from the At-The-Market Preferred Equity Program (Preferred Stock ATM Program), and proceeds from private placements and public offerings of additional common or preferred stock or other securities. To the extent that funds or appropriate properties are not available, fewer acquisitions will be made.
Currently, we derive our income primarily from real estate rental operations. Rental and Reimbursement Revenue (excluding Lease Termination Income in fiscal 2018, 20172021, 2020 and 20162019 of $210,261,$377,000, $-0-, and $-0-, respectively) was $139,161,849, $116,385,305$182.8 million, $167.8 million and $97,755,433$154.8 million for the years ended September 30, 2018, 20172021, 2020 and 2016,2019, respectively. Total undepreciated assets (which is our total assets excluding accumulated depreciation) were $1,925,443,520$2.6 billion and $1,614,123,838$2.2 billion as of September 30, 20182021 and 2017,2020, respectively.
As of September 30, 2018,2021, we had approximately 21,174,00024.9 million leasable square feet, of property, of which approximately 10,083,00011.6 million square feet, or 48%47%, consisting of 6065 separate stand-alone leases, were leased to FDX and its subsidiaries (7%(5% to FDX and 41%42% to FDX subsidiaries). These properties are located in 2427 different states. As of September 30, 2018,2021, the 6065 separate stand-alone leases that are leased to FDX and FDX subsidiaries had a weighted average lease maturity of 9.47.5 years. As of September 30, 2018,2021, in addition to FDX and its subsidiaries, the only tenantother tenants that leased 5% or more of our total square footage was FDX (including its subsidiaries).
During fiscal 2018, the only tenant that accountedwere subsidiaries of Amazon.com, Inc. (Amazon), which are parties to five separate stand-alone leases for 5% or moreproperties located in four different states, containing 1.5 million total square feet, comprising 6% of our rentaltotal leasable square feet. None of our properties are subject to a master lease or any cross-collateralization agreements.
Our Rental and reimbursement revenue was FDX (including its subsidiaries). Our rental and reimbursement revenueReimbursement Revenue from FDX and its subsidiaries for the fiscal years ended September 30, 2018, 20172021, 2020 and 2016,2019, respectively, totaled approximately $80,726,000, $68,151,000$104.3 million, $96.4 million and $52,793,000,$93.3 million, or 58% (7% from FDXcalculated as a percentage of total rent and 51% from FDX subsidiaries), 59% (7%reimbursement revenues were, 57% (5% from FDX and 52% from FDX subsidiaries) and 55% (9%, 58% (5% from FDX and 46%53% from FDX subsidiaries), and 60% (5% from FDX and 55% from FDX subsidiaries). In addition to FDX and its subsidiaries, the only tenants to comprise 5% or more of our total rentRental and reimbursement revenues.Reimbursement Revenue were subsidiaries of Amazon, which represented 6% of our Rental and Reimbursement Revenue for the fiscal years ended September 30, 2021 and 2020. Rental and Reimbursement Revenue from subsidiaries of Amazon for the fiscal year ended September 30, 2019 was less than 5% of our Rental and Reimbursement Revenue.
FDX is a publicly-owned companyand Amazon are publicly-listed companies and financial information related to this entity isthese entities are available at the SEC’s website,www.sec.gov. FDX isand Amazon are rated “BBB” and “AA”, respectively by S&P Global Ratings (www.standardandpoors.com) and isare rated “Baa2” and “A1”, respectively by Moody’s (www.moodys.com), which are both considered “Investment Grade” ratings. The references in this report to the SEC’s website, S&P Global Ratings’ website and Moody’s website are not intended to and do not include, or incorporate by reference into this report, the information of FDX, Amazon, S&P Global Ratings or Moody’s on such websites.
In addition to real estate property holdings, we held $154,920,545 in marketable REIT securities at September 30, 2018, representing 8.0% of our undepreciated assets (which is our total assets excluding accumulated depreciation). These liquid real estate holdings are not included in calculating the tenant concentration ratios above and therefore further increase our diversification. The securities portfolio provides us with additional diversification, liquidity, and income, and serves as a proxy for real estate when more favorable risk adjusted returns are not available.
Our weighted-averageweighted average lease expiration was 8.17.0 years and 7.97.1 years as of September 30, 20182021 and 2017,2020, respectively, and our average annualized rent per occupied square foot as of September 30, 20182021 and 20172020 was $6.01$6.61 and $5.93,$6.36, respectively. Our overall occupancy rate as of September 30, 20182021 and 20172020 was 99.6%99.7% and 99.3%99.4%, respectively. Our weighted average lease expiration has been 7.0 years or greater for over seven consecutive years. Our overall occupancy rate has been 98.9% or above for over six consecutive years.
We compete with other investors in real estate for attractive investment opportunities. These investors include other equity real estate investment trusts, limited partnerships, syndications and private investors, among others. Competition in the market areas in which we operate is significant and affects our ability to acquire or expand properties,acquisitions, occupancy levels, rental rates and operating expenses of certain properties. We have built long-term relationships within our tenant base as well as within the merchant builder community. These relationships have historically provided us with investment opportunities that fit our investment policy. The amount of new construction of industrial properties on the national level has been increasing the past six years following several years of historically low levels of new supply. These levels of new supply, although increasing, continue to be below historical norms. Driven to a large extent by the continued growth in ecommerce sales, demand for industrial space remains very strong, driving national occupancy rates to an all-time high of 95% currently. For further discussion of potential impact of competitive conditions on our business, see Item 1A: Risk Factors below.
Industrial space demand is very closely correlated to Gross Domestic Product (GDP) growth. Despite nine years of unprecedented monetary stimulus, real annual GDP growth averaged less than 2.0% over this period. Economic growth has been strong this past year further increasing demand for industrial space. The most significant demand driver for modern industrial real estate continues to be ecommerce. Every year since the turn of the century, the percentage of goods purchased on-line has increased at an average 16% annual growth rate. Today, excluding food, fuel, and autos, approximately 19% of total retail sales have migrated from traditional store sales to on-line sales and we expect this growth in market share to continue. We expect these favorable trends for the industrial real estate sector to be a leading demand driver for the foreseeable future, as consumers continue to embrace the added efficiencies of on-line consumption. The strong financial position of our tenants, together with the long duration of our leases, provides for high quality, reliable income streams throughout the business cycle.
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Information about our Executive Officers
We continue
The following table sets forth information with respect to invest in marketable securities of other REITs, which we generally limit to no more than approximately 10% of our undepreciated assets (which is our total assets excluding accumulated depreciation). Our investments in equity securities of other REITs provide us with additional diversification, liquidity, and income, and serves as a proxy for real estate when more favorable risk adjusted returns are not available. From time to time, we may purchase these securities on margin when the interest and dividend yields exceed the cost of funds. In general, we may borrow up to 50% of the value of the marketable securities, which was $154,920,545executive officers as of September 30, 2018. 2021:
Name | Age | Position | ||
Eugene W. Landy | 87 | Chairman of the Board and Founder | ||
Michael P. Landy | 59 | President and Chief Executive Officer | ||
Kevin S. Miller | 51 | Chief Financial and Accounting Officer | ||
Michael D. Prashad | 36 | General Counsel | ||
Richard P. Molke | 36 | Vice President of Asset Management |
Human Capital Resources
As of September 30, 2018,2021, we had borrowings of $26,608,676 under our margin line, bearing interest at 2.75%. Subsequent to fiscal yearend, on October 9, 2018, we paid off the margin loan. As of September 30, 2017, we had borrowings of $10,091,417 under our margin line, bearing interest at 2.05%. The REIT securities portfolio provides us with additional income, and to the extent not pledged to secure borrowings, provides us with additional liquidity. Such securities are subject to risks arising from adverse changes in market rates and prices, primarily market price risk relating to equity securities and interest rate risk relating to debt securities. From time to time, we may use derivative instruments to mitigate interest rate risk, however, this has not occurred during any periods presented. At September 30, 2018 and 2017, we had $154,920,545 and $123,764,770, respectively, of securities available for sale. The unrealized net gain (loss) on securities available for sale at September 30, 2018 and 2017 was $(24,744,579) and $6,570,565, respectively, resulting in a decrease for the fiscal year of $31,315,144. For the fiscal years ended September 30, 2018, 2017 and 2016, our net realized gains from the sale of securities were $111,387, $2,311,714 and $4,398,599, respectively.
On June 29, 2017, we entered into a Preferred Stock At-The-Market Sales Agreement Program with B. Riley FBR, Inc., or B. Riley (formerly FBR Capital Markets & Co.), that provided for the offer and sale of shares14 full-time employees. Women represent 57% of our 6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 par value per share,employees with 37.5% holding management level/leadership roles. Employees are offered great flexibility to meet personal and family needs. We endeavor to maintain workplaces that are free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression or any other status protected by applicable law. We conduct training to prevent harassment and discrimination and monitor employee conduct year-round. Recruitment, hiring, development, training, compensation and advancement at the Company are based on the individual’s qualifications, performance, skills and experience. Our employees are fairly compensated, without regard to gender, race and ethnicity, and routinely recognized for outstanding performance. Our compensation program is designed to attract and retain talent. We continually assess and strive to enhance employee satisfaction and engagement. Our employees, many of whom have a liquidation preference of $25.00 per share, or our 6.125% Series C preferred stock, having an aggregate sales price of uplong tenure with the Company, frequently express satisfaction with management. Our employees are offered regular opportunities to $100,000,000. On August 2, 2018, we replaced this program with a new Preferred Stock At-The-Market Sales Agreement Program (Preferred Stock ATM Program) with B. Riley that provides for the offer and sale from time to time of $125,000,000 of our 6.125% Series C preferred stock. We began selling shares through these programs on July 3, 2017. Since inception through September 30, 2018, we sold 3,088,001 shares under these programs at a weighted average price of $25.06 per share, and generated net proceeds, after offering expenses, of approximately $75,828,000, of which 1,648,556 shares were sold during the fiscal year ended 2018 at a weighted average price of $24.84 per share, and generated net proceeds, after offering expenses, of approximately $40,094,000. As of September 30, 2018, there is approximately $119,096,000 remaining that may be sold under the Preferred Stock ATM Program.participate in professional development programs.
As of September 30, 2018, 11,488,001 shares of the 6.125% Series C Preferred Stock were issued and outstanding.
Subsequent to fiscal yearend, in October 2018, we completed a public offering of 9,200,000 shares of our Common Stock (including the underwriters’ option to purchase 1,200,000 additional shares) at a price of $15.00 per share, before underwriting discounts. We received net proceeds from the offering, after deducting underwriting discounts and all other transaction costs, of approximately $132,339,000.
Investment and Other Policies
Our investment policy is to concentrate our investments in well-located, modern, single-tenant, industrial buildings, leased primarily to investment-grade tenants or their subsidiaries on long-term net leases. Our strategy is to obtain a favorable yield spread between the income from the net-leased industrial properties and interest costs. In addition, we believe that investments in well-located, modern industrial properties provide a potential for long-term capital appreciation. There is the risk that, upon expiration of leases, the properties will become vacant or will be re-leased at lower rents. The results obtained from re-leasing the properties will depend on the market for industrial properties at that time.
In fiscal 2018,2021, approximately 8%5% of our gross leasable area, representing 16ten leases totaling 1,546,6371.2 million square feet, was set to expire. WeAll ten of these leases have been renewed, 11 of the 16 leases that were set to expire. One of the 11 leases, which is with FedEx Ground Package System, Inc.resulting in a 100% retention rate for a property located in Hanahan (Charleston), SC, renewed for only four months because the tenant moved its operations from our 91,776 square foot facility to a newly constructed, much larger, 265,318 square foot facility, which is also located in Charleston, SC. We purchased this new facility on August 15, 2018. Excluding this four month lease renewal, the ten leases that have renewed, represent 972,048 square feet, or 63% of the expiring square footage, and have a weighted average lease term of 6.84.2 years. These ten lease renewals resultresulted in a U.S. GAAP straight-line weighted average lease rate of $5.87$4.77 per square foot. The renewed weighted average initial cash rent per square foot also results in ais $4.66. This compares to the former weighted average lease raterent of $5.87$4.49 per square foot. This representsfoot on a U.S. GAAP straight-line basis and the former weighted average cash rent of $4.64 per square foot, resulting in an increase in the weighted average lease rate of 4.08%6.2% on a U.S. GAAP straight-line basis and an increase in the weighted average lease rate of 2.80%0.4% on a cash basis. Five of the sixteen leases, representing 482,813 square feet or 31% of the expiring square footage, did not renew. Three of these five buildings, representing 183,837 square feet or 12% of the expiring square footage, have been sold and one of the remaining five properties, representing 218,120 square or 14% of the expiring square footage, has been re-tenanted.
We seek to invest in well-located, modern, single tenant,single-tenant, industrial buildings, leased primarily to investment-grade tenants or their subsidiaries on long-term net leases. In management’s opinion, the recently acquired facilities meet these criteria. We have a concentration of properties leased to FDX and FDX subsidiaries.subsidiaries and to subsidiaries of Amazon. This is a risk that shareholders should consider. FDX is a publicly-owned companyand Amazon are publicly-listed companies and financial information related to this entity isthese entities are available at the SEC’s website,www.sec.gov. FDX isand Amazon are rated “BBB” and “AA”, respectively by S&P Global Ratings (www.standardandpoors.com) and isare rated “Baa2” and “A1”, respectively by Moody’s (www.moodys.com), which are both considered “Investment Grade” ratings. The references in this report to the SEC’s website, S&P Global Ratings’ website and Moody’s website are not intended to and do not include, or incorporate by reference into this report, the information of FDX, Amazon, S&P Global Ratings or Moody’s on such websites.
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We may issuehave considered issuing securities for property; however, this has not occurred to date. We may repurchase or reacquire our shares from time to time if, in the opinion of the Board of Directors, such acquisition is in our best interest. NoOn September 14, 2021, our Board of Directors reaffirmed our Common Stock Repurchase Program (the “Program”) that authorizes us to purchase up to $50.0 million of shares were repurchased or reacquired during fiscal 2018 and, as of September 30, 2018, we do not own any of our own shares.common stock. The timing, manner, price and amount of any repurchase will be determined by us at our discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. The Program does not have a termination date and may be suspended or discontinued at our discretion without prior notice. During fiscal 2020, we repurchased 400,000 shares of our common stock for $4.3 million at an average price of $10.69 per share. These were the only repurchases made under the Program thus far.
Property Management
With the exception of threetwo properties, all of our 111122 properties are self-managed by us.
WeFor the properties we self-manage, we paid fees directly to local property management subagents of approximately $437,000, $394,000$518,000, $482,000 and $356,000$468,000 for fiscal years ended September 30, 2018, 20172021, 2020 and 2016,2019, respectively.
Governmental Regulations
Our industrial properties are subject to various federal, state and local regulatory laws and requirements, including, but not limited to, the Americans with Disabilities Act, zoning regulations, building codes and land use laws, and building, occupancy and other permit requirements. Noncompliance could result in Stow, OHthe imposition of governmental fines or the award of damages to private litigants. While we believe that we are currently in material compliance with these regulatory requirements, the requirements may change or new requirements may be imposed that could require significant unanticipated expenditures by us. Additionally, local zoning and Streetsboro, OH are managed by GEIS Companies (GEIS). Management fees we paidland use laws, environmental statutes and other governmental requirements may restrict, or negatively impact, our property operations, or expansion, rehabilitation and reconstruction activities and such regulations may prevent us from taking advantage of economic opportunities. Future changes in federal, state or local tax regulations applicable to GEIS forREITs, real property or income derived from our real estate, which may be retroactive, could impact the fiscal yearsfinancial performance, operations, and value of our properties and the Company.
Tax Regulation
We have elected to be taxed as a REIT under Sections 856 through 860 of the Code, commencing with our taxable year which ended September 30, 2018, 20171968. Our qualification and 2016 were approximately $78,000, $52,000taxation as a REIT depends upon our ability to meet on a continuing basis, through actual annual operating results, distribution levels and $50,000, respectively. These management fees were reimburseddiversity of stock ownership, the various qualification tests and organizational requirements imposed under the Code, as discussed below. We believe that we are organized and have operated in such a manner as to qualify under the Code for taxation as a REIT since our inception, and we intend to continue to operate in such a manner.
To maintain our qualification as a REIT, two separate percentage tests relating to the source of our gross income must be satisfied annually. First, at least 75% of our gross income (excluding gross income from prohibited transactions) for each taxable year generally must be derived directly or indirectly from investments relating to real property (including dividends paid by other REITs, mortgages on real property, “rents from real property,” gain, and, in certain circumstances, interest) or from certain types of temporary investments. Second, at least 95% of our gross income (excluding gross income from prohibited transactions) for each taxable year must be derived from such real property investments described above, dividends, interest and gain from the sale or disposition of stock or securities, or from any combination of the foregoing. Rents received by us will qualify as “rents from real property” in satisfying the above gross income tests only if several conditions are met. First, the amount of rent generally must not be based in whole or in part on the income or profits of any person. However, amounts received or accrued generally will not be excluded from “rents from real property” solely by the tenants.
Our industrialreason of being based on a fixed percentage or percentages of gross receipts or sales. Second, rents received from a tenant will not qualify as “rents from real property” if we, or a direct or indirect owner of 10% or more of our stock, actually or constructively own 10% or more of such tenant. Third, if rent attributable to personal property that is leased in Carlstadt, NJ is owned by Palmer Terrace Realty Associates, LLC. We own 51%connection with a lease of Palmer Terrace Realty Associates, LLC. Thisreal property is managed by Marcus Associates, an entity affiliatedgreater than 15% of the total rent received under the lease, then the portion of rent attributable to such personal property will not qualify as “rents from real property.” This 15% test is based on relative fair market values of the real and personal property. Generally, for rents to qualify as “rents from real property” for the purposes of the gross income tests, we are only allowed to provide services that are both “usually or customarily rendered” in connection with the ownerrental of real property and not otherwise considered “rendered to the occupant.” Further, for the rent paid pursuant to our leases to qualify for purposes of the 49% non-controlling interest. Management fees paid by Palmer Terrace Realty Associates, LLCgross income tests, the leases must be respected as true leases for federal income tax purposes and not be treated as service contracts, joint ventures or some other type of arrangement. We structure our leases to Marcus Associates were approximately $17,000, $16,000generate qualifying income.
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In addition to the income tests discussed above, to maintain our qualification as a REIT, at the close of each quarter of our taxable year, we must satisfy seven tests relating to the nature of our assets. We limit our investments to assets that will allow us to meet these requirements:
● | At least 75% of the value of our total assets must be represented by “real estate assets”, cash, cash items and government securities, as such terms are defined in the Code. | |
● | Not more than 25% of the value of our total assets may be represented by securities, other than those in the 75% asset class. | |
● | Except for certain investments in REITs, taxable REIT subsidiaries (TRSs) and other securities in the 75% asset class, the value of any one issuer’s securities owned by us may not exceed 5% of the value of our total assets. | |
● | Except for certain investments in REITs, TRSs and other securities in the 75% asset class, we may not own more than 10% of the total voting power of any one issuer’s outstanding securities. | |
● | Except for certain investments in REITs, TRSs and other securities in the 75% asset class, we may not own more than 10% of the total value of the outstanding securities of any one issuer, other than securities that qualify for the debt safe harbors. | |
● | The aggregate value of all securities of TRSs held by us may not exceed 20% of the value of our gross assets. | |
● | No more than 25% of the value of our total assets may consist of debt instruments issued by “publicly offered REITs” (i.e., a REIT that is required to file annual and periodic reports with the SEC under the Securities Exchange Act of 1934) to the extent such debt instruments are not secured by real property or interests in real property. |
Finally, in order to qualify as a REIT, we must, among other requirements, distribute, each year, to our shareholders at least 90 percent of our taxable income, excluding net capital gains. To the extent that we satisfy the 90 percent distribution requirement, but distribute less than 100 percent of our taxable income, we will be subject to federal corporate income tax on our undistributed income and $16,000 formay incur a 4 percent nondeductible excise tax on the fiscal years ended September 30, 2018, 2017amount not distributed. As a result, we distribute substantially all of our taxable income in each year, and 2016, respectively.must seek other sources of capital to fund our operations and growth.
Environmental Matters
Under various federal, state and local environmental laws, statutes, ordinances, rules and regulations, an owner of real property may be liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, in or under such property as well as certain other potential costs relating to hazardous or toxic substances. These liabilities may include government fines and penalties and damages for injuries to persons and adjacent property. Such laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence or disposal of such substances. Although generally our tenants are primarily responsible for any environmental damages and claims related to the leased premises, in the event of the bankruptcy or inability of a tenant of such premises to satisfy any obligations with respect to such environmental liability, we may be required to satisfy such obligations. In addition, as the owner of such properties, we may be held directly liable for any such damages or claims irrespective of the provisions of any lease.
From time to time, in connection with managing the properties or upon acquisition of a property, we authorize the preparation of Phase I and, when necessary, Phase II environmental reports with respect to our properties. Based upon such environmental reports and our ongoing review of our properties, as of the date of this Annual Report, we are not aware of any environmental condition with respect to any of our properties which we believe would be reasonably likely to have a material adverse effect on our financial condition and/or results of operations. There can be no assurance, however, that (1) the discovery of environmental conditions, the existence or severity of which were previously unknown; (2) changes in law; (3) the conduct of tenants; or (4) activities relating to properties in the vicinity of our properties, will not expose us to material liability in the future.
Contact Information
Additional information about us can be found on our website which is located atwww.mreic.reit. Information contained on or hyperlinked from our Website is not incorporated by reference into and should not be considered part of this Annual Report on Form 10-K or our other filings with the Securities and Exchange Commission (SEC). We make available, free of charge, on or through our website, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
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The following risk factors address the material risks concerning our business. If any of the risks discussed in this report were to occur, our business, prospects, financial condition, results of operation and our ability to service our debt and make distributions to our shareholders could be materially and adversely affected and the market price per share of our stock could decline significantly. Some statements in this report, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”
Risks Relating to our Proposed Merger with ILPT
ILPT’s acquisition of us pursuant to the Merger Agreement is subject to various closing conditions and other risks which may cause the merger to be delayed or not completed at all or have other adverse consequences. Our proposed merger with ILPT is subject to various closing conditions that must be satisfied or waived to complete the merger, including approval by the holders of two-thirds of our outstanding common stock. There can be no assurance that these conditions will be satisfied or waived or that the merger will be completed in a timely manner or at all. Failure to satisfy or obtain waivers of any closing conditions may jeopardize or delay the completion of the merger and result in additional expenditures of money and resources. There is no assurance that our stockholders will approve the merger with ILPT by the affirmative vote of holders of two-thirds of our outstanding common stock, as required by Maryland law and our charter. If the merger is not completed for any reason, the price of our Common Stock may decline to the extent that the current market price reflects an assumption that the merger will be consummated and our stockholders will not receive any payment for their shares in connection with the merger. Legal proceedings instituted against us and others relating to the Merger Agreement with ILPT also could delay or prevent the merger from becoming effective within the agreed upon timeframe. In addition, we or ILPT may elect to terminate the Merger Agreement in certain circumstances, and the parties can mutually decide to terminate the Merger Agreement at any time prior to the consummation of the merger, either before or after stockholder approval. Further, uncertainty among our employees about their future roles after the completion of the proposed merger may impair our ability to attract, retain and motivate key personnel, and the proposed merger may disrupt our business relationships with our existing and potential tenants, suppliers, financing sources and other business partners, who may attempt to negotiate changes in existing business relationships or consider entering into business relationships with parties other than us. Any adverse consequence of the merger could be exacerbated by any delays in completion of the merger or termination of the Merger Agreement. Termination of the Merger Agreement could materially adversely affect our business operations and financial results, which in turn would materially and adversely affect the price of our common stock.
We have incurred, and will continue to incur, significant transaction and related costs in connection with the proposed merger, our Board of Directors’ review of strategic alternatives, and related matters. We have incurred and expect to continue to incur substantial costs associated with our strategic review processes, the proposed merger with ILPT and our previous merger agreement with Equity Commonwealth, which was terminated after it did not receive the requisite approval of our stockholders. Such costs include the payment of certain fees and expenses incurred in connection with the proposed merger with ILPT and the terminated merger agreement with Equity Commonwealth, including legal and other professional advisory fees as well as the reimbursement of approximately $10 million of transaction expenses incurred by Equity Commonwealth and, in the event our common stockholders do not approve the merger agreement with ILPT and as a result the merger agreement is terminated, a similar reimbursement of up to $10 million of ILPT’s expenses. We have also incurred significant expenses in connection with litigation and potential litigation involving one of our shareholders, Blackwells Capital LLC, and our former general counsel, and in settling such litigation and potential litigation in November 2021. Additional unanticipated costs also may be incurred.
Under the Merger Agreement with ILPT, we are subject to restrictions on our business activities. The Merger Agreement contains numerous restrictions on our business activities while the merger is pending, including, among other things, restrictions on our ability to acquire other businesses and assets, dispose of our assets, make investments, enter into certain contracts, repurchase or issue securities, pay dividends, make capital expenditures, amend our organizational documents, incur indebtedness and settle litigation. These restrictions could prevent us from pursuing strategic business opportunities, taking actions with respect to our business that we may consider advantageous and responding effectively and/or timely to competitive pressures and industry developments, which may as a result materially adversely affect our business, results of operations and financial condition.
Real Estate Industry Risks
Our business and financial results are affected by local real estate conditions in areas where we own properties.We may be affected adversely by general economic conditions and local real estate conditions. For example, an oversupply of industrial properties in a local area or a decline in the attractiveness of our properties to tenants and potential tenants could have a negative effect on us.
Other factors that may affect general economic conditions or local real estate conditions include but are not limited to:
● | population and demographic trends; | |
● | employment and personal income trends; | |
● | zoning, use and other regulatory restrictions; | |
● | income tax laws; | |
● | changes in interest rates and availability and costs of financing; and | |
● | competition from other available real estate. |
We may be unable to compete with our larger competitors and other alternatives available to tenants or potential tenants of our properties. The real estate business is highly competitive. We compete for properties with other real estate investors and purchasers, including other real estate investment trusts, limited partnerships, syndications and private investors, some of whom may have greater financial resources, revenues and geographical diversity than we have. Furthermore, we compete for tenants with other property owners. All of our industrial properties are subject to significant local competition. We also compete with a wide variety of institutions and other investors for capital funds necessary to support our investment activities and asset growth. To the extent that we are unable to effectively compete in the marketplace, our business may be adversely affected.
We are subject to significant regulation that inhibits our activities and may increase our costs.Local zoning and use laws, environmental statutes and other governmental requirements may restrict expansion, rehabilitation and reconstruction activities. These regulations may prevent us from taking advantage of economic opportunities. Legislation such as the Americans with Disabilities Act may require us to modify our properties at a substantial cost and noncompliance could result in the imposition of fines or an award of damages to private litigants. Future legislation may impose additional requirements. We may incur additional costs to comply with any future requirements.
Our investments are concentrated in the industrial distribution sector and our business would be adversely affected by an economic downturn in that sector.Our investments in real estate assets are primarily concentrated in the industrial distribution sector. This concentration may expose us to the risk of economic downturns in this sector to a greater extent than if our business activities included a more significant portion of other sectors of the real estate industry.
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Risks Associated with Our Properties
We may be unable to renew or extend leases or re-let space as leases expire.While we seek to invest in well-located, modern, single tenant,single-tenant, industrial buildings, leased to investment-grade tenants or their subsidiaries on long-term net leases, a number of our properties are subject to short-term leases. When a lease expires, a tenant may elect not to renew or extend it. We may not be able to re-let the property on similar terms, if we are able to re-let the property at all. The terms of renewal, extension or re-lease (including the cost of required renovations and/or concessions to tenants) may be less favorable to us than the prior lease. If we are unable to re-let all or a substantial portion of our properties, or if the rental rates upon such re-letting are significantly lower than expected rates, our cash generated before debt repayments and capital expenditures and our ability to make expected distributions, may be adversely affected. We have established an annual budget for renovation and re-letting expenses that we believe is reasonable in light of each property’s operating history and local market characteristics. However, this budget may not be sufficient to cover these expenses.
Our business is substantially dependent on FedEx Corporationcertain tenants.FDX, together with its subsidiaries, is our largest tenant, consisting of 6065 separate stand-alone leases located in 2427 different states as of September 30, 2018.2021. As of September 30, 2018,2021, we had approximately 21,174,00024.9 million square feet of property, of which approximately 10,083,00011.6 million square feet, or 48%47%, were leased to FDX and its subsidiaries (7%(5% from FDX and 41%42% from FDX subsidiaries). As of September 30, 2021, in addition to FDX and its subsidiaries, the only tenants that leased 5% or more of our total square footage were subsidiaries of Amazon, which are parties to five separate stand-alone leases for properties located in four different states, containing 1.5 million total square feet, comprising 6% of our total leasable square feet. Rental and reimbursement revenue from FDX and its subsidiaries is approximately 58% (7%was 57% (5% from FDX and 51%52% from FDX subsidiaries) of total rental and reimbursement revenue for fiscal 2018. No other tenant accounted for2021. In addition to FDX and its subsidiaries, the only tenants to comprise 5% or more of our total Rental and Reimbursement revenueRevenue were subsidiaries of Amazon, which represented 6% of our Rental and Reimbursement Revenue for the fiscal 2018. year ended September 30, 2021. None of our properties are subject to a master lease or any cross-collateralization agreements.
As a result of this concentration with FDX and its subsidiaries and with subsidiaries of Amazon, our business, financial condition and results of operations, including the amount of cash available for distribution to our stockholders, could be adversely affected if we are unable to do business with FDXthem or FDX reduces itsif they reduced their business with us or FDX and its subsidiariesif they were to become unable to make lease payments because of a downturn in itstheir business or otherwise.
FDX is a publicly-owned companyand Amazon are publicly-listed companies and financial information related to this entity isthese entities are available at the SEC’s website,www.sec.gov. FDX is rated “BBB” by S&P Global Ratings (www.standardandpoors.com) and is rated “Baa2” by Moody’s (www.moodys.com), which are both considered “Investment Grade” ratings. The references in this report to the SEC’s website, S&P Global Ratings’ website and Moody’s website are not intended to and do not include or incorporate by reference into this report the information of FDX, S&P Global Ratings or Moody’s on such websites.
We are subject to risks involved in single tenant leases.single-tenant leases. We focus our acquisition activities on real properties that are net-leased to single tenants.single-tenants. Therefore, the financial failure of, or other default by, a single tenantsingle-tenant under its lease is likely to cause a significant reduction in the operating cash flow generated by the property leased to that tenant and might decrease the value of that property. In addition, we will be responsible for 100% of the operating costs following a vacancy at a single tenantsingle-tenant building.
We may be affected negatively by tenant financial difficulties and leasing delays.At any time, a tenant may experience a downturn in its business that may weaken its financial condition. Similarly, a general decline in the economy may result in a decline in the demand for space at our industrial properties. As a result, our tenants may delay lease commencement, fail to make rental payments when due, or declare bankruptcy. Any such event could result in the termination of that tenant’s lease and losses to us.
We receive a substantial portion of our income as rents under long-term leases.If tenants are unable to comply with the terms of their leases because of rising costs or falling revenues, we in our sole discretion, may deem it advisable to modify lease terms to allow tenants to pay a lower rental rate or a smaller share of operating costs, taxes and insurance. If a tenant becomes insolvent or bankrupt, we cannot be sure that we could recover the premises from the tenant promptly or from a trustee or debtor-in-possession in any bankruptcy proceeding relating to the tenant. We also cannot be sure that we would receive rent in the proceeding sufficient to cover our expenses with respect to the premises. If a tenant becomes bankrupt, the federal bankruptcy code will apply and, in some instances, may restrict the amount and recoverability of our claims against the tenant. A tenant’s default on its obligations to us for any reason could adversely affect our financial condition and the cash we have available for distribution.
We may be unable to sell properties when appropriate because real estate investments are illiquid.Real estate investments generally cannot be sold quickly and, therefore, will tend to limit our ability to vary our property portfolio promptly in response to changes in economic or other conditions. In addition, the Code may limit our ability to sell our properties. The inability to respond promptly to changes in the performance of our property portfolio could adversely affect our financial condition and ability to service debt and make distributions to our shareholders.
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Environmental liabilities could affect our profitability.We face possible environmental liabilities. Environmental laws today can impose liability on a previous owner or operator of a property that owned or operated the property at a time when hazardous or toxic substances were disposed on, or released from, the property. A conveyance of the property, therefore, does not relieve the owner or operator from liability. As a current or former owner and operator of real estate, we may be required by law to investigate and clean up hazardous substances released at or from the properties we currently own or operate or have in the past owned or operated. We may also be liable to the government or to third parties for property damage, investigation costs and cleanup costs. In addition, some environmental laws create a lien on the contaminated site in favor of the government for damages and costs the government incurs in connection with the contamination. Contamination may adversely affect our ability to sell or lease real estate or to borrow using the real estate as collateral. We are not aware of any environmental liabilities relating to our investment properties which would have a material adverse effect on our business, assets, or results of operations. However, we cannot assure you that environmental liabilities will not arise in the future and that such liabilities will not have a material adverse effect on our business, assets or results of operation.
Actions by our competitors may decrease or prevent increases in the occupancy and rental rates of our properties.We compete with other owners and operators of real estate, some of which own properties similar to ours in the same submarkets in which our properties are located. If our competitors offer space at rental rates below current market rates or below the rental rates we currently charge our tenants, we may lose potential tenants, and we may be pressured to reduce our rental rates below those we currently charge in order to retain tenants when our tenants’ leases expire. As a result, our financial condition, cash flow and cash available for distribution, the market price of our preferred and common stock and our ability to satisfy our debt service obligations could be materially and adversely affected.
Coverage under our existing insurance policies may be inadequate to cover losses. Weather conditions and natural disasters such as hurricanes, tornadoes, earthquakes, floods, droughts, fires and other environmental conditions can harm our business operations. We generally maintain insurance policies related to our business, including casualty, general liability and other policies, covering our business operations, employees and assets. However, we would be required to bear all losses that are not adequately covered by insurance. In addition, there are certain losses that are not generally insured because it is not economically feasible to insure against them, including losses due to riots or acts of war. If an uninsured loss or a loss in excess of insured limits were to occur with respect to one or more of our properties, then we could lose the capital we invested in the properties, as well as the anticipated future revenue from the properties and, in the case of debt, which is with recourse to us, we would remain obligated for any mortgage debt or other financial obligations related to the properties. Although we believe that our insurance programs are adequate, we cannot assure you that we will not incur losses in excess of our insurance coverage, or that we will be able to obtain insurance in the future at acceptable levels and reasonable costs.
We may be unable to acquire properties on advantageous terms or acquisitions may not perform as we expect.We have acquired individual properties and intend to continue to do so. However, we may be unable to acquire any of the properties that we may identify as potential acquisition opportunities in the future. Our acquisition activities and their success are subject to the following risks:
● | when we are able to locate a desired property, competition from other real estate investors may significantly increase the purchase price; | |
● | acquired properties may fail to perform as expected; | |
● | the actual costs of repositioning or redeveloping acquired properties may be higher than our estimates; |
acquired properties may be located in new markets where we face risks associated with an incomplete knowledge or understanding of the local market, a limited number of established business relationships in the area and a relative unfamiliarity with local governmental and permitting procedures; | ||
● | we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and as a result, our results of operations and financial condition could be adversely affected; and | |
● | we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, to the seller. As a result, if a claim were asserted against us based upon ownership of those properties, we might have to pay substantial sums to resolve it, which could adversely affect our cash flow and financial condition. |
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Financing Risks
We face inherent risks associated with our debt incurrence.We finance a portion of our investments in properties and marketable securities through the incurrence of debt. We are subject to the risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest. In addition, debt creates other risks, including:
● | rising interest rates on our variable rate debt; | |
● | inability to repay or refinance existing debt as it matures, which may result in forced disposition of assets on disadvantageous terms; | |
● | one or more lenders under our | |
● | refinancing terms that are less favorable than the terms of existing debt; and | |
● | inability to meet required payments of principal and/or interest. |
We mortgage many of our properties, which subjects us to the risk of foreclosure in the event of non-payment.We mortgage many of our properties to secure payment of indebtedness and, if we are unable to meet mortgage payments, the property could be foreclosed upon or transferred to the mortgagee with a consequent loss of income and asset value. A foreclosure of one or more of our properties could adversely affect our financial condition, results of operations, cash flow, and ability to service debt and make distributions and the market price of our preferred and common stock.
We face risks related to “balloon payments” and refinancings.Certain mortgages will have significant outstanding principal balances on their maturity dates, commonly known as “balloon payments.” There can be no assurance that we will have the funds available to fund the balloon payment or that we will be able to refinance the debt on favorable terms or at all. To the extent we cannot either pay off or refinance this debt on favorable terms or at all, we may be forced to dispose of properties on disadvantageous terms or pay higher interest rates, either of which could have an adverse impact on our financial performance and ability to service debt and make distributions.
We face risks associated with our dependence on external sources of capital.In order to qualify as a REIT, we are required each year to distribute to our shareholders at least 90% of our REIT taxable income, and we are subject to tax on our income to the extent it is not distributed. Because of this distribution requirement, we may not be able to fund all future capital needs from cash retained from operations. As a result, to fund capital needs, we rely on third-party sources of capital, which we may not be able to obtain on favorable terms, if at all. Our access to third-party sources of capital depends upon a number of factors, including (i) general market conditions; (ii) the market’s perception of our growth potential; (iii) our current and potential future earnings and cash distributions; and (iv) the market price of our capital stock. Additional debt financing may substantially increase our debt-to-total capitalization ratio. Additional equity issuances may dilute the holdings of our current shareholders.
We may become more highly leveraged, resulting in increased risk of default on our obligations and an increase in debt service requirements which could adversely affect our financial condition and results of operations and our ability to pay distributions.We have incurred, and may continue to incur, indebtedness in furtherance of our activities.activities. Our governing documents do not limit the amount of indebtedness we may incur. Accordingly, our Board of Directors may authorize us to incur additional debt and would do so, for example, if it were necessary to maintain our status as a REIT.debt. We could therefore become more highly leveraged, resulting in an increased risk of default on our obligations and an increase in debt service requirements which could adversely affect our financial condition and results of operations and our ability to pay distributions to shareholders.
Fluctuations in interest rates could materially affect our financial results.Because a portion of our debt bears interest at variable rates, increases in interest rates could materially increase our interest expense. If the United States Federal Reserve increases short-term interest rates, this may have a significant upward impact on shorter-term interest rates, including the interest rates that our variable rate debt is based upon. Potential future increases in interest rates and credit spreads may increase our interest expense and affect our ability to obtain fixed rate debt at favorable interest rates and therefore negatively affect our financial condition and results of operations, and reduce our access to the debt or equity capital markets.
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The interest rate on our unsecured line of credit facility is based on the London Interbank Offered Rate (“LIBOR”) or Bank of Montreal’s (BMO’s) prime lending rate. All indications are that the LIBOR reference rate will be phased out completely by June 30, 2023. At that point in time, our unsecured line of credit facility will no longer have the LIBOR reference rate available and the reference rate will need to be replaced or we will be required to use BMO’s prime lending rate as a reference rate, which historically has resulted in higher effective interest rates than the LIBOR reference rate. We have very good working relationships with our lenders and all indications we have received from our lenders is that their goal is to have a replacement reference rate for our unsecured line of credit facility. However, because this is the first time a reference rate for our unsecured line of credit facility will stop being published, we cannot be sure how a replacement rate event will conclude. Until we have more clarity from our lenders on how they plan on dealing with a replacement rate event, we cannot be certain of the impact to us.
Covenants in our loan documents could limit our flexibility and adversely affect our financial condition.The terms of our various credit agreements and other indebtedness require us to comply with a number of customary financial and other covenants, such as maintaining debt service coverage and leverage ratios and maintaining insurance coverage. These covenants may limit our flexibility in our operations, and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness even if we had satisfied our payment obligations. If we were to default under credit agreements or other debt instruments, our financial condition could be adversely affected.
Risks Related to our Status as a REIT
If our leases are not respected as true leases for federal income tax purposes, we would fail to qualify as a REIT.To qualify as a REIT, we must, among other things, satisfy two gross income tests, under which specified percentages of our gross income must be passive income, such as rent. For the rent paid pursuant to our leases to qualify for purposes of the gross income tests, the leases must be respected as true leases for federal income tax purposes and not be treated as service contracts, joint ventures or some other type of arrangement. The determination of whether a lease is a true lease depends upon an analysis of all the surrounding facts and circumstances. We believe that our leases will be respected as true leases for federal income tax purposes. However, there can be no assurance that the Internal Revenue Service (IRS) will agree with this view. If the leases are not respected as true leases for federal income tax purposes, we would not be able to satisfy either of the two gross income tests applicable to REITs, and we could lose our REIT status.
Failure to make required distributions would subject us to additional tax.In order to qualify as a REIT, we must, among other requirements, distribute, each year, to our shareholders at least 90 percent of our taxable income, excluding net capital gains. To the extent that we satisfy the 90 percent distribution requirement, but distribute less than 100 percent of our taxable income, we will be subject to federal corporate income tax on our undistributed income. In addition, we will incur a 4 percent nondeductible excise tax on the amount, if any, by which our distributions (or deemed distributions) and the amounts of income retained on which we have paid corporate income tax in any year are less than the sum of:
● | 85 percent of our ordinary income for that year; | |
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● | 95 percent of our capital gain net earnings for that year; and | |
● | 100 percent of our undistributed taxable income from prior years. |
To the extent we pay out in excess of 100 percent of our taxable income for any tax year, we may be able to carry forward such excess to subsequent years to reduce our required distributions for purposes of the 4 percent excise tax in such subsequent years. We intend to pay out our income to our shareholders in a manner intended to satisfy the 90 percent distribution requirement. Differences in timing between the recognition of income and the related cash receipts, the effects of non-deductible capital expenditures, the creation of reserves or the effect of required debt amortization payments could require us to borrow money or sell assets (potentially during unfavorable market conditions) to pay out enough of our taxable income to satisfy the 90 percent distribution requirement and to avoid corporate income tax.
We may not have sufficient cash available from operations to pay distributions, and, therefore, distributions may be made from borrowings.The actual amount and timing of distributions will be determined by our Board of Directors in its discretion and typically will depend on the amount of cash available for distribution, which will depend on items such as current and projected cash requirements, limitations on distributions imposed by law or our financing arrangements and tax considerations. As a result, we may not have sufficient cash available from operations to pay distributions as required to maintain our status as a REIT. Therefore, we may need to borrow funds to make sufficient cash distributions in order to maintain our status as a REIT, which may cause us to incur additional interest expense as a result of an increase in borrowed funds for the purpose of paying distributions.
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We may be required to pay a penalty tax upon the sale of a property.The federal income tax provisions applicable to REITs provide that any gain realized by a REIT on the sale of property, other than foreclosure property, held as inventory or other property held primarily for sale to customers in the ordinary course of business is treated as income from a “prohibited transaction” that is subject to a 100 percent penalty tax. Under current law, unless a sale of real property qualifies for a safe harbor, the question of whether the sale of real estate or other property constitutes the sale of property held primarily for sale to customers is generally a question of the facts and circumstances regarding a particular transaction. It is our intent that we and our subsidiaries will hold the interests in the real estate for investment with a view to long-term appreciation, engage in the business of acquiring and owning real estate, and make occasional sales as are consistent with our investment objectives. We do not intend to engage in prohibited transactions. We cannot assure you, however, that we will only make sales that satisfy the requirements of the safe harbors or that the IRS will not successfully assert that one or more of such sales are prohibited transactions. The 100% tax will not apply to gains from the sale of property that is held through a taxable REIT subsidiary or other taxable corporation, although such income will be subject to tax in the hands of the corporation at regular U.S. federal income tax rates.
There is a risk of changes in the tax law applicable to real estate investment trusts. Because the IRS, the United States Treasury Department and Congress frequently review federal income tax legislation, we cannot predict whether, when or to what extent new federal tax laws, regulations, interpretations or rulings will be adopted. Any of such legislative actions may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect taxation of us and/or our investors.
The recently enacted Tax Cuts and Jobs Act of 2017, or the TCJA, as amended by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, has significantly changed the U.S. federal income taxation of U.S. businesses and their owners, including REITs and their shareholders. Changes made by the TCJA and the CARES Act that could affect us and our shareholders include:
● | temporarily reducing individual U.S. federal income tax rates on ordinary income; the highest individual U.S. federal income tax rate has been reduced from 39.6% to 37% for taxable years beginning after December 31, 2017 and before January 1, 2026; | |
● | permanently eliminating the progressive corporate tax rate structure, with a maximum corporate tax rate of 35%, and replacing it with a flat corporate tax rate of 21%; | |
● | permitting a deduction for certain pass-through business income, including dividends received by our shareholders from us that are not designated by us as capital gain dividends or qualified dividend income, which will generally allow individuals, trusts, and estates to deduct up to 20% of such amounts for taxable years beginning after December 31, 2017 and before January 1, 2026; | |
● | reducing the highest rate of withholding with respect to our distributions to non-U.S. stockholders that are treated as attributable to gains from the sale or exchange of U.S. real property interests from 35% to 21%; | |
● | limiting our deduction for net operating losses to 80% of REIT taxable income (prior to the application of the dividends paid deduction) | |
● | generally limiting the deduction for net business interest expense in excess of a specified percentage (50% for taxable years beginning in 2019 and 2020 and 30% for subsequent taxable years) of a business’s adjusted taxable income except for taxpayers that engage in certain real estate businesses and elect out of this rule (provided that such electing taxpayers must use an alternative depreciation system for certain property); and | |
● | eliminating the corporate alternative minimum tax. |
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You are urged to consult with your tax advisor with respect to the status of legislative, regulatory, judicial or administrative developments and proposals and their potential effect on an investment in our securities.
To qualify as a REIT, we must comply with certain highly technical and complex requirements.We cannot be certain we have complied, and will always be able to comply, with the requirements to qualify as a REIT because there are few judicial and administrative interpretations of these provisions. In addition, facts and circumstances that may be beyond our control may affect our ability to continue to qualify as a REIT. We cannot assure you that new legislation, regulations, administrative interpretations or court decisions will not change the tax laws significantly with respect to our qualification as a REIT or with respect to the federal income tax consequences of qualification. We believe that we have qualified as a REIT since our inception and intend to continue to qualify as a REIT. However, we cannot assure you that we are qualified or will remain qualified.
We may be unable to comply with the strict income distribution requirement applicable to REITs.As noted above, to maintain qualification as a REIT under the Code, a REIT must annually distribute to its shareholders at least 90% of its REIT taxable income, excluding the dividends paid deduction and net capital gains. This requirement limits our ability to accumulate capital. We may not have sufficient cash or other liquid assets to meet the 90% distribution requirements. Difficulties in meeting the 90% distribution requirement might arise due to competing demands for our funds or to timing differences between tax reporting and cash receipts and disbursements, because income may have to be reported before cash is received, because expenses may have to be paid before a deduction is allowed, because deductions may be disallowed or limited or because the IRS may make a determination that adjusts reported income. In those situations, we might be required to borrow funds or sell properties on adverse terms in order to meet the 90% distribution requirement and interest and penalties could apply which could adversely affect our financial condition. If we fail to satisfy the 90% distribution requirement, we would cease to be taxed as a REIT.
Notwithstanding our status as a REIT, we are subject to various federal, state and local taxes on our income and property.For example, we will be taxed at regular corporate rates on any undistributed taxable income, including undistributed net capital gains; provided, however, that properly designated undistributed capital gains will effectively avoid taxation at the shareholder level. We may be subject to other federal income taxes and may also have to pay some state income or franchise taxes because not all states treat REITs in the same manner as they are treated for federal income tax purposes. In addition, any taxable REIT subsidiary that we may form will be subject to regular corporate federal, state and local taxes. Any of these taxes would decrease cash available for distributions to stockholders.
Other Risks
We may not be able to access adequate cash to fund our business.Our business requires access to adequate cash to finance our operations, distributions, capital expenditures, debt service obligations, development and redevelopment costs and property acquisition costs, if any. We expect to generate the cash to be used for these purposes primarily with operating cash flow, borrowings under secured and unsecured term loans, proceeds from sales of strategically identified assets and, when market conditions permit, through the issuance of debt and equity securities from time to time. We may not be able to generate sufficient cash to fund our business, particularly if we are unable to renew or extend leases, lease vacant space or re-lease space as leases expire according to expectations.
We are dependent on key personnel.Our executive and other senior officers have a significant role in our success. Our ability to retain our management group or to attract suitable replacements should any members of the management group leave is dependent on the competitive nature of the employment market. The loss of services from key members of the management group or a limitation in their availability could adversely affect our financial condition and cash flow. Further, such a loss could be negatively perceived in the capital markets.
We may amend our business policies without shareholder approval.Our Board of Directors determines our growth, investment, financing, capitalization, borrowing, operations and distributions policies. In addition, our charter provides that our Board of Directors may revoke or otherwise terminate our REIT election, without the approval of our shareholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. Although our Board of Directors has no present intention to amend or reverse any of these policies, they may be amended or revised without notice to shareholders. Accordingly, shareholders may not have control over changes in our policies. We cannot assure you that changes in our policies will serve fully the interests of all shareholders.
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The market value of our preferred and common stock could decrease based on our performance and market perception and conditions.The market value of our preferred and common stock may be based primarily upon the market’s perception of our growth potential and current and future cash dividends, and may be secondarily based upon the real estate market value of our underlying assets. The market price of our preferred and common stock is influenced by their respective distributions relative to market interest rates. Rising interest rates may lead potential buyers of our stock to expect a higher distribution rate, which could adversely affect the market price of our stock. In addition, rising interest rates could result in increased expense, thereby adversely affecting cash flow and our ability to service our indebtedness and pay distributions.
There are restrictions on the ownership and transfer of our capital stock.To maintain our qualification as a REIT under the Code, no more than 50% in value of our outstanding capital stock may be owned, actually or by attribution, by five or fewer individuals, as defined in the Code to also include certain entities, during the last half of a taxable year. Accordingly, our charter contains provisions restricting the ownership and transfer of our capital stock. These restrictions may discourage a tender offer or other transaction, or a change in management or of control of us that might involve a premium price for our common stock or preferred stock or that our shareholders otherwise believe to be in their best interests, and may result in the transfer of shares acquired in excess of the restrictions to a trust for the benefit of a charitable beneficiary and, as a result, the forfeiture by the acquirer of the benefits of owning the additional shares.
Our earnings are dependent, in part, upon the performance of our investment portfolio.As permitted by the Code, we opportunistically invest in and own marketable securities of other REITs, which we generallyREITs. We intend to limit the size of this portfolio to no more than approximately 10%5% of our undepreciated assets, (which is ourwhich we define as total assets excluding accumulated depreciation).depreciation. We continue to believe that our REIT securities portfolio provides us with diversification, income, a source of potential liquidity when needed and also serves as a proxy for real estate when more favorable risk adjusted returns are not available in the private real estate markets. Our decision to reduce this threshold mainly stems from the implementation of accounting rule ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”, which took effect at the beginning of our fiscal year ended September 30, 2019. This rule requires that quarterly changes in the market value of our marketable securities flow through our Consolidated Statements of Income. The implementation of this accounting rule has resulted in increased volatility in our reported earnings and some of our key performance metrics. To the extent that the fair value of those investments declinesdecline or those investments do not provide an attractive return, our earnings and cash flow could be adversely affected. BeginningAs mentioned above, beginning with our fiscal year endingended September 30, 2019, all changes in the fair value of the equity securities of other REITs that we own, whether realized or unrealized, will bewere recognized as gains or losses in our consolidated statement of income. As a result, fluctuations in the fair value of those investments will in the future, impact our earnings even if we have not sold the underlying investments.
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We areIf our proposed merger with ILPT is not consummated, we will remain subject to restrictions that may impede our ability to effect a future change in control.Certain provisions contained in our charter and bylaws and certain provisions of Maryland law may have the effect of discouraging a third party from making an acquisition proposal for us and thereby inhibit a change in control. These provisions include the following:
● | Our charter provides for three classes of directors with the term of office of one class expiring each year, commonly referred to as a “staggered board.” By preventing common shareholders from voting on the election of more than one class of directors at any annual meeting of shareholders, this provision may have the effect of keeping the current members of our Board of Directors in control for a longer period of time than shareholders may desire. | |
● | Our charter generally limits any stockholder from acquiring more than 9.8% (in value or in number of shares, whichever is more restrictive) of our outstanding equity stock (defined as all of our classes of capital stock, except our excess stock). While this provision is intended to assist us in qualifying as a REIT for federal income tax purposes, the ownership limit may also limit the opportunity for shareholders to receive a premium for their shares of common stock that might otherwise exist if an investor was attempting to assemble a block of shares in excess of 9.8% of the outstanding shares of equity stock or otherwise | |
● | The request of shareholders entitled to cast a majority of the votes entitled to be cast at such meeting is necessary for shareholders to call a special meeting. We also require advance notice from shareholders for the nomination of directors or proposals of business to be considered at a meeting of shareholders. |
Our Board of Directors may authorize and cause us to issue securities without shareholder approval. Under our charter, our Board of Directors has the power to classify and reclassify any of our unissued shares of capital stock into shares of capital stock with such preferences, rights, powers and restrictions as the Board of Directors may determine. | ||
● | “Business combination” provisions that provide that, unless exempted, a Maryland corporation may not engage in certain business combinations, including mergers, dispositions of 10 percent or more of its assets, certain issuances of shares of stock and other specified transactions, with an “interested shareholder” or an affiliate of an interested shareholder for five years after the most recent date on which the interested shareholder became an interested shareholder, and thereafter unless specified criteria are met. An interested shareholder is defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof or an affiliate or associate of ours who was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our then outstanding voting stock at any time within the two-year period immediately prior to the date in question. In our charter, we have expressly elected that the Maryland Business Combination Act not govern or apply to any transaction with a related company, UMH Properties, Inc. (UMH), a Maryland corporation. | |
● | The duties of directors of a Maryland corporation do not require them to, among other things (a) accept, recommend or respond to any proposal by a person seeking to acquire control of the corporation, (b) authorize the corporation to redeem any rights under, or modify or render inapplicable, any shareholders rights plan, (c) make a determination under the Maryland Business Combination Act or the Maryland Control Share Acquisition Act to exempt any person or transaction from the requirements of those provisions, or (d) act or fail to act solely because of the effect of the act or failure to act may have on an acquisition or potential acquisition of control of the corporation or the amount or type of consideration that may be offered or paid to the shareholders in an acquisition. |
We cannot assure you that we will be able to pay distributions regularly.Our ability to pay distributions in the future is dependent on our ability to operate profitably and to generate cash from our operations and the operations of our subsidiaries and is subject to limitations under our financing arrangements and Maryland law. Under the Maryland General Corporation Law, or the MGCL, a Maryland corporation generally may not make a distribution if, after giving effect to the distribution, the corporation would not be able to pay its debts as the debts became due in the usual course of business, or the corporation’s total assets would be less than the sum of its total liabilities plus, unless the charter permits otherwise, the amount that would be needed if the corporation were to be dissolved at the time of the distribution to satisfy the preferential rights upon dissolution of stockholders whose preferential rights on dissolution are superior to those receiving the distribution. Accordingly, we cannot guarantee that we will be able to pay distributions on a regular quarterly basis in the future.
Dividends on our capital stock do not qualify for the reduced tax rates available for some dividends. Income from “qualified dividends” payable to U.S. stockholders that are individuals, trusts and estates are generally subject to tax at preferential rates. Dividends payable by REITs, however, generally are not eligible for the preferential tax rates applicable to qualified dividend income. Although these rules do not adversely affect our taxation or the dividends payable by us, to the extent that the preferential rates continue to apply to regular corporate qualified dividends, investors who are individuals, trusts and estates may perceive an investment in us to be relatively less attractive than an investment in the stock of a non-REIT corporation that pays dividends, which could materially and adversely affect the value of the shares of, and per share trading price of, our capital stock. It should be noted that the TCJA provides for a deduction from income for individuals, trusts and estates up to 20% of certain REIT dividends, which reduces the effective tax rate on such dividends below the effective tax rate on interest, though the deduction is generally not as favorable as the preferential rate on qualified dividends. The deduction for certain REIT dividends, unlike the favorable rate for qualified dividends, expires for taxable years beginning after December 31, 2025.
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General Risk Factors
Coverage under our existing insurance policies may be inadequate to cover losses. Weather conditions and natural disasters such as hurricanes, tornadoes, earthquakes, floods, droughts, fires and other environmental conditions can harm our business operations. We generally maintain insurance policies related to our business, including casualty, general liability and other policies, covering our business operations, employees and assets. However, we would be required to bear all losses that are not adequately covered by insurance. In addition, there are certain losses that are not generally insured because it is not economically feasible to insure against them, including losses due to riots or acts of war. If an uninsured loss or a loss in excess of insured limits were to occur with respect to one or more of our properties, then we could lose the capital we invested in the properties, as well as the anticipated future revenue from the properties and, in the case of debt, which is with recourse to us, we would remain obligated for any mortgage debt or other financial obligations related to the properties. Although we believe that our insurance programs are adequate, we cannot assure you that we will not incur losses in excess of our insurance coverage, or that we will be able to obtain insurance in the future at acceptable levels and reasonable costs.
Future terrorist attacks and military conflicts could have a material adverse effect on general economic conditions, consumer confidence and market liquidity.Among other things, it is possible that interest rates may be affected by these events. An increase in interest rates may increase our costs of borrowing, leading to a reduction in our earnings. Terrorist acts could also result in significant damages to, or loss of, our properties. We and our tenants may be unable to obtain adequate insurance coverage on acceptable economic terms for losses resulting from acts of terrorism. Our lenders may require that we carry terrorism insurance even if we do not believe this insurance is necessary or cost effective. We may also be prohibited under the applicable lease from passing all or a portion of the cost of such insurance through to the tenant. Should an act of terrorism result in an uninsured loss or a loss in excess of insured limits, we could lose capital invested in a property, as well as the anticipated future revenues from a property, while remaining obligated for any mortgage indebtedness or other financial obligations related to the property. Any loss of these types could adversely affect our financial condition.
Disruptions in the financial markets could affect our ability to obtain financing on reasonable terms and have other adverse effects on us and the market price of our capital stock.Over the last several years, the United States stock and credit markets have experienced significant price volatility, dislocations and liquidity disruptions, which have caused market prices of many stocks and debt securities to fluctuate substantially and the spreads on prospective debt financing to widen considerably. Continued uncertainty in the stock and credit markets may negatively impact our ability to access additional financing at reasonable terms, which may negatively affect our ability to acquire properties and otherwise pursue our investment strategy. A prolonged downturn in the stock or credit markets may cause us to seek alternative sources of potentially less attractive financing, and may require us to adjust our investment strategy accordingly. These types of events in the stock and credit markets may make it more difficult or costly for us to raise capital through the issuance of the common stock, preferred stock or debt securities. The potential disruptions in the financial markets may have a material adverse effect on the market value of the common stock and preferred stock and the return we receive on our properties and investments, as well as other unknown adverse effects on us or the economy in general.
We are subject to risks arising from litigationlitigation..We may become involved in litigation. Litigation can be costly, and the results of litigation are often difficult to predict. We may not have adequate insurance coverage or contractual protection to cover costs and liability in the event we are sued, and to the extent we resort to litigation to enforce our rights, we may incur significant costs and ultimately be unsuccessful or unable to recover amounts we believe are owed to us. We may have little or no control of the timing of litigation, which presents challenges to our strategic planning.
DividendsWe are subject to risks relating to cybersecurity. An information security or operational technology incident, including a cybersecurity breach, could have a material adverse impact on our capital stock do not qualify for the reduced tax rates available for some dividends.Income from “qualified dividends” payablebusiness or reputation. As part of our regular review of potential risks, we have an Information Technology (“IT”) Manager who works with our IT service providers to U.S. stockholders that are individuals, trustsidentify and estates are generally subjectmitigate any such risks. We have established a Cybersecurity Subcommittee of our Board’s Audit Committee to tax at preferential rates. Dividends payable by REITs, however, generally are not eligible for the preferential tax rates applicable to qualified dividend income. Although these rules do not adversely affect our taxation or the dividends payable by us,review and provide high level guidance on cybersecurity related issues of importance to the extent thatCompany. We purchase cyber liability insurance in amounts deemed reasonable by our insurance advisors.
We face various risks and uncertainties related to public health crises, including the preferential ratesrecent and ongoing global outbreak of the novel coronavirus (COVID-19). The COVID-19 Pandemic and its impacts are uncertain and hard to measure, but may have a material adverse effect on us. We face various risks and uncertainties related to public health crises, including ongoing global COVID-19 Pandemic, which has disrupted financial markets and significantly impacted worldwide economic activity to date and is likely to continue to applydo so. The future effects of the evolving impact of the COVID-19 Pandemic as well as mandatory and voluntary actions taken to regular corporate qualified dividends, investors whomitigate the public health impact of the Pandemic may have a material adverse effect on our financial condition. The COVID-19 Pandemic and social and governmental responses to the Pandemic have caused, and are individuals, trustslikely to continue to cause, severe economic, market and estatesother disruptions worldwide. Although the COVID-19 Pandemic and related societal and government responses have not, to date, had a material impact on our business or financial results, the extent to which COVID-19 and related actions may, perceive an investment in us to be relatively less attractive than an investment in the stockfuture, impact our operations cannot be predicted with any degree of confidence. As a non-REIT corporation that pays dividends, which could materially and adversely affectresult, we cannot at this time predict the valueimpact of the sharesCOVID-19 Pandemic, but it could have a material adverse effect on our business, financial condition, liquidity, results of operations and per share trading price of, our capital stock.prospects.
ITEM 1B – UNRESOLVED STAFF COMMENTS
None.
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We operate as a REIT. Our portfolio is primarily comprised of real estate holdings, some of which have been long-term holdings carried on our financial statements at depreciated cost. We believe that their current market values exceed both the original cost and the depreciated cost.
The following table sets forth certain information concerning our real estate investments as of September 30, 2018:2021:
Mortgage | Mortgage | |||||||||||||||||||||||||||
Fiscal Year | Square | Balance | Balance | |||||||||||||||||||||||||
State | City (MSA) | Acquisition | Type | Footage | 9/30/2018 | City (MSA, if applicable) (Tenant) | Fiscal Year Acquisition | Type | Square Footage | 9/30/2021 (in thousands) | ||||||||||||||||||
AL | Huntsville | 2005 | Industrial | 88,653 | $ | 370,903 | Huntsville (FDX Ground) | 2005 | Industrial | 88,890 | $ | -0- | ||||||||||||||||
AL | Mobile | 2018 | Industrial | 362,942 | 18,832,395 | Mobile (Amazon) | 2018 | Industrial | 362,942 | 15,609 | ||||||||||||||||||
AZ | Tolleson (Phoenix) | 2003 | Industrial | 283,358 | 3,719,709 | Tolleson (Phoenix) (Coca-Cola) | 2003 | Industrial | 288,045 | 1,103 | ||||||||||||||||||
CO | Colorado Springs | 2016 | Industrial | 225,362 | 16,651,710 | Colorado Springs (FDX Ground) | 2016 | Industrial | 225,362 | 13,469 | ||||||||||||||||||
CO | Denver | 2005 | Industrial | 69,865 | 414,049 | Denver (FDX Ground) | 2005 | Industrial | 69,865 | -0- | ||||||||||||||||||
CT | Newington (Hartford) | 2001 | Industrial | 54,812 | -0- | Newington (Hartford) (Hartford HealthCare) | 2001 | Industrial | 54,812 | -0- | ||||||||||||||||||
FL | Cocoa | 2008 | Industrial | 144,138 | -0- | Cocoa (FDX Ground) | 2008 | Industrial | 144,138 | -0- | ||||||||||||||||||
FL | Davenport (Orlando) | 2016 | Industrial | 310,922 | 23,702,918 | Davenport (Orlando) (FDX Ground) | 2016 | Industrial | 310,922 | 19,243 | ||||||||||||||||||
FL | Daytona Beach | 2018 | Industrial | 399,440 | 19,187,819 | Daytona Beach (B. Braun) | 2018 | Industrial | 399,440 | 16,170 | ||||||||||||||||||
FL | Ft. Myers | 2017 | Industrial | 213,672 | 13,280,803 | Ft. Myers (FDX Ground) | 2017 | Industrial | 213,672 | 10,873 | ||||||||||||||||||
FL | Homestead (Miami) | 2017 | Industrial | 237,756 | 23,313,676 | Homestead (Miami) (FDX Ground) | 2017 | Industrial | 237,756 | 19,193 | ||||||||||||||||||
FL | Jacksonville (FDX) | 1999 | Industrial | 95,883 | -0- | Jacksonville (FDX) | 1999 | Industrial | 95,883 | -0- | ||||||||||||||||||
FL | Jacksonville (FDX Ground) | 2015 | Industrial | 297,579 | 16,243,754 | Jacksonville (FDX Ground) | 2015 | Industrial | 304,859 | 12,587 | ||||||||||||||||||
FL | Lakeland | 2006 | Industrial | 32,105 | -0- | Lakeland (FDX) | 2007 | Industrial | 32,105 | -0- | ||||||||||||||||||
FL | Orlando | 2008 | Industrial | 110,638 | -0- | Orlando (FDX) | 2008 | Industrial | 110,621 | -0- | ||||||||||||||||||
FL | Punta Gorda | 2007 | Industrial | 34,624 | -0- | Punta Gorda (FDX) | 2007 | Industrial | 34,624 | -0- | ||||||||||||||||||
FL | Tampa (FDX Ground) | 2004 | Industrial | 170,779 | 5,144,319 | Tampa (FDX Ground) | 2004 | Industrial | 174,975 | -0- | ||||||||||||||||||
FL | Tampa (FDX) | 2006 | Industrial | 95,662 | -0- | Tampa (FDX) | 2006 | Industrial | 95,662 | -0- | ||||||||||||||||||
FL | Tampa (Tampa Bay Grand Prix) | 2005 | Industrial | 68,385 | -0- | Tampa (Tampa Bay Grand Prix) | 2005 | Industrial | 68,385 | -0- | ||||||||||||||||||
GA | Augusta (FDX Ground) | 2005 | Industrial | 59,358 | 338,789 | Augusta (FDX Ground) | 2005 | Industrial | 59,358 | -0- | ||||||||||||||||||
GA | Augusta (FDX) | 2006 | Industrial | 30,184 | -0- | Augusta (FDX) | 2007 | Industrial | 30,184 | -0- | ||||||||||||||||||
GA | Braselton (Atlanta) | 2018 | Industrial | 373,750 | 39,700,000 | Braselton (Atlanta) (FDX Ground) | 2018 | Industrial | 373,750 | 33,730 | ||||||||||||||||||
GA | Griffin (Atlanta) | 2006 | Industrial | 218,120 | -0- | Griffin (Atlanta) (Rinnai) | 2006 | Industrial | 218,120 | -0- | ||||||||||||||||||
GA | Savannah | 2018 | Industrial | 831,764 | 32,215,696 | Locust Grove (Atlanta) (Home Depot) | 2021 | Industrial | 657,518 | 55,307 | ||||||||||||||||||
GA | Savannah (Shaw) | 2018 | Industrial | 831,764 | 26,273 | |||||||||||||||||||||||
GA | Savannah (FDX Ground) | 2019 | Industrial | 126,520 | 15,091 | |||||||||||||||||||||||
IA | Urbandale (Des Moines) | 1994 | Industrial | 36,270 | -0- | Urbandale (Des Moines) (Foundation Building Materials) | 1994 | Industrial | 36,270 | -0- | ||||||||||||||||||
IL | Burr Ridge (Chicago) | 1997 | Industrial | 12,500 | -0- | Burr Ridge (Chicago) (Sherwin-Williams) | 1998 | Industrial | 12,500 | -0- | ||||||||||||||||||
IL | Elgin (Chicago) | 2002 | Industrial | 89,052 | -0- | Elgin (Chicago) (Joseph T. Ryerson and Son) | 2002 | Industrial | 89,123 | -0- | ||||||||||||||||||
IL | Granite City (St. Louis, MO) | 2001 | Industrial | 184,800 | -0- | Granite City (St. Louis, MO) (Anheuser-Busch) | 2002 | Industrial | 184,800 | -0- | ||||||||||||||||||
IL | Montgomery (Chicago) | 2004 | Industrial | 171,200 | -0- | Montgomery (Chicago) (Home Depot) | 2005 | Industrial | 171,230 | -0- | ||||||||||||||||||
IL | Rockford (Collins Aerospace Systems) | 2015 | Industrial | 38,833 | -0- | Rockford (Raytheon Technologies Corporation) | 2015 | Industrial | 38,833 | -0- | ||||||||||||||||||
IL | Rockford (Sherwin-Williams Co.) | 2011 | Industrial | 66,387 | -0- | Rockford (Sherwin-Williams) | 2011 | Industrial | 66,387 | -0- | ||||||||||||||||||
IL | Sauget (St. Louis, MO) | 2015 | Industrial | 198,773 | 8,563,797 | Sauget (St. Louis, MO) (FDX Ground) | 2015 | Industrial | 198,729 | 6,659 | ||||||||||||||||||
IL | Schaumburg (Chicago) | 1997 | Industrial | 73,500 | -0- | Schaumburg (Chicago) (FDX) | 1997 | Industrial | 73,500 | -0- | ||||||||||||||||||
IL | Wheeling (Chicago) | 2003 | Industrial | 123,000 | -0- | Wheeling (Chicago) (FDX Ground) | 2003 | Industrial | 123,000 | -0- | ||||||||||||||||||
IN | Greenwood (Indianapolis) (ULTA) | 2015 | Industrial | 671,354 | 15,855 | |||||||||||||||||||||||
IN | Indianapolis (FDX Ground) | 2014 | Industrial | 327,822 | 7,366 | |||||||||||||||||||||||
IN | Greenwood (Indianapolis) | 2015 | Industrial | 671,354 | 20,159,025 | Greenwood (Indianapolis) (Amazon) | 2020 | Industrial | 615,747 | 48,802 | ||||||||||||||||||
IN | Indianapolis | 2014 | Industrial | 327,822 | 10,437,151 | Lafayette (Toyota) | 2019 | Industrial | 350,418 | 15,234 | ||||||||||||||||||
KS | Edwardsville (Kansas City) (Carlisle Tire) | 2003 | Industrial | 179,280 | -0- | Edwardsville (Kansas City) (Carlstar Group) | 2003 | Industrial | 179,280 | -0- | ||||||||||||||||||
KS | Edwardsville (Kansas City) (International Paper) | 2014 | Industrial | 280,000 | 9,189,343 | Edwardsville (Kansas City) (International Paper) | 2014 | Industrial | 280,019 | 6,804 | ||||||||||||||||||
KS | Olathe (Kansas City) | 2016 | Industrial | 313,763 | 19,956,867 | Olathe (Kansas City) (FDX Ground) | 2016 | Industrial | 313,763 | 16,217 | ||||||||||||||||||
KS | Topeka | 2009 | Industrial | 40,000 | 860,364 | Topeka (Coca-Cola) | 2009 | Industrial | 40,000 | -0- | ||||||||||||||||||
KY | Buckner (Louisville) | 2014 | Industrial | 558,600 | 15,305,669 | Buckner (Louisville) (Treehouse) | 2014 | Industrial | 558,509 | 12,993 | ||||||||||||||||||
KY | Frankfort (Lexington) | 2015 | Industrial | 599,840 | 16,639,132 | Frankfort (Lexington) (Jim Beam) | 2015 | Industrial | 599,840 | 13,483 | ||||||||||||||||||
KY | Louisville | 2016 | Industrial | 137,500 | 6,525,135 | Louisville (Snap-on) | 2016 | Industrial | 137,500 | 5,267 | ||||||||||||||||||
LA | Covington (New Orleans) | 2016 | Industrial | 175,315 | 11,133,990 | Covington (New Orleans) (FDX Ground) | 2016 | Industrial | 175,315 | 8,917 | ||||||||||||||||||
MD | Beltsville (Washington, DC) | 2001 | Industrial | 148,881 | -0- | Beltsville (Washington, DC) (FDX Ground) | 2001 | Industrial | 148,881 | -0- | ||||||||||||||||||
MI | Livonia (Detroit) | 2013 | Industrial | 172,005 | 6,294,503 | Livonia (Detroit) (FDX Ground) | 2013 | Industrial | 172,668 | 4,267 | ||||||||||||||||||
MI | Orion | 2007 | Industrial | 245,633 | -0- | Orion (FDX Ground) | 2007 | Industrial | 245,633 | -0- | ||||||||||||||||||
MI | Romulus (Detroit) | 1998 | Industrial | 71,933 | -0- | Romulus (Detroit) (FDX) | 1998 | Industrial | 71,933 | -0- | ||||||||||||||||||
MI | Walker (Grand Rapids) | 2017 | Industrial | 343,483 | 19,468,554 | Walker (Grand Rapids) (FDX Ground) | 2017 | Industrial | 343,483 | 16,027 | ||||||||||||||||||
MN | Stewartville (Rochester) (1) | 2013 | Industrial | 60,398 | 2,115,962 | Stewartville (Rochester) (FDX Ground) (1) | 2013 | Industrial | 60,370 | 1,292 | ||||||||||||||||||
MO | Kansas City | 2015 | Industrial | 158,417 | 6,633,001 | Kansas City (Bunzl) | 2015 | Industrial | 158,417 | -0- | ||||||||||||||||||
MO | Liberty (Kansas City) | 1998 | Industrial | 95,898 | -0- | Liberty (Kansas City) (Dakota Bodies) | 1998 | Industrial | 96,687 | -0- | ||||||||||||||||||
MO | O’Fallon (St. Louis) | 1994 | Industrial | 102,135 | -0- | O’Fallon (St. Louis) (Pittsburgh Glass Works) | 1995 | Industrial | 102,135 | -0- | ||||||||||||||||||
MO | St. Joseph (Woodstream/Altec) | 2001 | Industrial | 382,880 | -0- | |||||||||||||||||||||||
MS | Olive Branch (Memphis, TN) (Anda) | 2012 | Industrial | 234,660 | 5,558 | |||||||||||||||||||||||
MS | Olive Branch (Memphis, TN) (Milwaukee Tool) | 2013 | Industrial | 861,889 | 16,095 |
20 |
Mortgage Balance | ||||||||||||||
State | City (MSA) | Fiscal Year Acquisition | Type | Square Footage | 9/30/2021 (in thousands) | |||||||||
MS | Richland (Jackson) (FDX) | 1994 | Industrial | 36,000 | $ | -0- | ||||||||
MS | Ridgeland (Jackson) (Graybar) | 1993 | Industrial | 26,340 | -0- | |||||||||
NC | Concord (Charlotte) (FDX Ground) | 2016 | Industrial | 330,717 | 14,197 | |||||||||
NC | Concord (Charlotte) (FDX Ground II) | 2017 | Industrial | 354,482 | 20,587 | |||||||||
NC | Fayetteville (Victory Packaging) | 1997 | Industrial | 148,000 | -0- | |||||||||
NC | Whitsett (Greensboro) (FDX Ground) | 2020 | Industrial | 286,281 | 28,277 | |||||||||
NC | Winston-Salem (Style Crest) | 2002 | Industrial | 106,507 | -0- | |||||||||
NE | Omaha (FDX) | 1999 | Industrial | 89,115 | -0- | |||||||||
NJ | Somerset (Various Tenants) (2) | 1970 | Shopping Center | 64,220 | -0- | |||||||||
NJ | Trenton (FDX Ground) | 2019 | Industrial | 347,145 | 47,039 | |||||||||
NY | Cheektowaga (Buffalo) (Sonwil) | 2007 | Industrial | 104,981 | -0- | |||||||||
NY | Halfmoon (Albany) (UPS) | 2012 | Industrial | 75,000 | -0- | |||||||||
NY | Hamburg (Buffalo) (FDX Ground) | 2017 | Industrial | 338,584 | 17,411 | |||||||||
OH | Bedford Heights (Cleveland) (FDX) | 2007 | Industrial | 82,269 | -0- | |||||||||
OH | Cincinnati (Keurig Dr Pepper) | 2015 | Industrial | 63,840 | -0- | |||||||||
OH | Lancaster (Columbus) (Magna) | 2020 | Industrial | 152,995 | 8,311 | |||||||||
OH | Kenton (International Paper) | 2017 | Industrial | 298,472 | 9,592 | |||||||||
OH | Lebanon (Cincinnati) (Siemens Real Estate) | 2012 | Industrial | 51,130 | -0- | |||||||||
OH | Monroe (Cincinnati) (UGN) | 2015 | Industrial | 387,000 | 11,453 | |||||||||
OH | Plain City (Columbus) (FDX Ground) | 2021 | Industrial | 500,268 | 45,322 | |||||||||
OH | Richfield (Cleveland) (FDX Ground) | 2006 | Industrial | 131,152 | -0- | |||||||||
OH | Stow (Cooper Tire) | 2017 | Industrial | 219,765 | 10,106 | |||||||||
OH | Streetsboro (Cleveland) (Best Buy) | 2012 | Industrial | 368,060 | 7,332 | |||||||||
OH | West Chester Twp. (Cincinnati) (FDX Ground) | 2000 | Industrial | 103,818 | -0- | |||||||||
OK | Oklahoma City (Amazon) | 2018 | Industrial | 300,000 | 16,501 | |||||||||
OK | Oklahoma City (Amazon II) | 2020 | Industrial | 120,780 | 9,272 | |||||||||
OK | Oklahoma City (Bunzl) | 2017 | Industrial | 110,361 | 4,243 | |||||||||
OK | Oklahoma City (FDX Ground) | 2012 | Industrial | 158,340 | 1,767 | |||||||||
OK | Tulsa (Keurig Dr Pepper) | 2014 | Industrial | 46,240 | 1,267 | |||||||||
PA | Altoona (FDX Ground) (1) | 2014 | Industrial | 122,522 | 1,987 | |||||||||
PA | Imperial (Pittsburgh) (GE) | 2016 | Industrial | 125,860 | 8,734 | |||||||||
PA | Monaca (Pittsburgh) (NF&M) | 1973 | Industrial | 255,658 | -0- | |||||||||
SC | Aiken (Augusta, GA) (Autoneum) | 2017 | Industrial | 315,560 | 12,003 | |||||||||
SC | Charleston (FDX) | 2018 | Industrial | 121,683 | 11,444 | |||||||||
SC | Charleston (FDX Ground) | 2018 | Industrial | 265,318 | 25,171 | |||||||||
SC | Ft. Mill (Charlotte, NC) (FDX Ground) | 2010 | Industrial | 176,939 | -0- | |||||||||
SC | Hanahan (Charleston) (SAIC) | 2005 | Industrial | 302,400 | -0- | |||||||||
SC | Hanahan (Charleston) (Amazon) | 2005 | Industrial | 91,776 | -0- | |||||||||
TN | Chattanooga (FDX) | 2007 | Industrial | 60,637 | -0- | |||||||||
TN | Kodak (Knoxville) (FDX Ground) | 2021 | Industrial | 259,053 | -0- | |||||||||
TN | Lebanon (Nashville) (Cracker Barrel) | 2011 | Industrial | 381,240 | -0- | |||||||||
TN | Memphis (FDX Trade Networks) | 2010 | Industrial | 449,900 | 2,364 | |||||||||
TN | Shelby County (Land) | 2007 | Land | N/A | -0- | |||||||||
TX | Carrollton (Dallas) (Carrier Global Corporation) | 2010 | Industrial | 184,317 | 3,781 | |||||||||
TX | Corpus Christi (FDX Ground) | 2012 | Industrial | 46,253 | -0- | |||||||||
TX | Edinburg (FDX Ground) | 2011 | Industrial | 164,207 | -0- | |||||||||
TX | El Paso (FDX Ground) | 2007 | Industrial | 144,199 | -0- | |||||||||
TX | Ft. Worth (Dallas) (FDX Ground) | 2015 | Industrial | 312,923 | 16,364 | |||||||||
TX | Houston (National Oilwell) | 2010 | Industrial | 91,295 | -0- | |||||||||
TX | Lindale (Tyler) (FDX Ground) | 2015 | Industrial | 163,383 | 4,393 | |||||||||
TX | Mesquite (Dallas) (FDX Ground) | 2017 | Industrial | 351,874 | 25,461 | |||||||||
TX | Spring (Houston) (FDX Ground) | 2014 | Industrial | 181,176 | 5,931 | |||||||||
TX | Waco (FDX Ground) | 2012 | Industrial | 150,710 | 3,280 | |||||||||
UT | Ogden (Salt Lake City) (FDX) | 2020 | Industrial | 69,734 | 7,805 | |||||||||
VA | Charlottesville (FDX) | 1999 | Industrial | 48,064 | -0- | |||||||||
VA | Mechanicsville (Richmond) (FDX) | 2001 | Industrial | 112,799 | -0- | |||||||||
VA | Richmond (Locke Supply) | 2004 | Industrial | 60,000 | -0- | |||||||||
VA | Roanoke (CHEP USA) | 2007 | Industrial | 83,000 | -0- | |||||||||
VA | Roanoke (FDX Ground) | 2013 | Industrial | 103,580 | 2,866 | |||||||||
VT | Burlington (FDX Ground) | 2021 | Industrial | 143,972 | -0- | |||||||||
WA | Burlington (Seattle/Everett) (FDX Ground) | 2016 | Industrial | 210,445 | 14,264 | |||||||||
WI | Cudahy (Milwaukee) (FDX Ground) | 2001 | Industrial | 139,564 | -0- | |||||||||
WI | Green Bay (FDX Ground) (1) | 2014 | Industrial | 99,102 | 1,613 | |||||||||
24,924,752 | $ | 839,622 |
Fiscal Year | Square | Mortgage Balance | ||||||||||||
State | City (MSA) | Acquisition | Type | Footage | 9/30/2018 | |||||||||
MO | St. Joseph | 2001 | Industrial | 382,880 | $ | -0- | ||||||||
MS | Olive Branch (Memphis, TN) (Anda Pharmaceuticals, Inc.) | 2012 | Industrial | 234,660 | 7,564,186 | |||||||||
MS | Olive Branch (Memphis, TN) (Milwaukee Tool) | 2013 | Industrial | 861,889 | 21,722,567 | |||||||||
MS | Richland (Jackson) | 1994 | Industrial | 36,000 | -0- | |||||||||
MS | Ridgeland (Jackson) | 1993 | Industrial | 26,340 | -0- | |||||||||
NC | Concord (Charlotte) | 2016 | Industrial | 330,717 | 17,813,451 | |||||||||
NC | Concord (Charlotte) | 2017 | Industrial | 354,482 | 24,863,355 | |||||||||
NC | Fayetteville | 1997 | Industrial | 148,000 | -0- | |||||||||
NC | Winston-Salem | 2002 | Industrial | 106,507 | -0- | |||||||||
NE | Omaha | 1999 | Industrial | 89,115 | -0- | |||||||||
NJ | Carlstadt (New York, NY) (2) | 2001 | Industrial | 60,400 | 1,580,181 | |||||||||
NJ | Somerset (3) | 1970 | Shopping Center | 64,220 | -0- | |||||||||
NY | Cheektowaga (Buffalo) | 2002 | Industrial | 104,981 | -0- | |||||||||
NY | Halfmoon (Albany) | 2012 | Industrial | 75,000 | -0- | |||||||||
NY | Hamburg (Buffalo) | 2017 | Industrial | 338,584 | 21,328,714 | |||||||||
OH | Bedford Heights (Cleveland) | 2007 | Industrial | 82,269 | -0- | |||||||||
OH | Cincinnati | 2015 | Industrial | 63,840 | -0- | |||||||||
OH | Kenton | 2017 | Industrial | 298,472 | 11,473,387 | |||||||||
OH | Lebanon (Cincinnati) | 2012 | Industrial | 51,130 | -0- | |||||||||
OH | Monroe (Cincinnati) | 2015 | Industrial | 232,200 | 7,126,384 | |||||||||
OH | Richfield (Cleveland) | 2006 | Industrial | 131,152 | -0- | |||||||||
OH | Stow | 2017 | Industrial | 219,765 | 12,130,343 | |||||||||
OH | Streetsboro (Cleveland) | 2012 | Industrial | 368,060 | 9,300,481 | |||||||||
OH | West Chester Twp. (Cincinnati) | 2000 | Industrial | 103,818 | -0- | |||||||||
OK | Oklahoma City (Amazon) | 2018 | Industrial | 300,000 | 19,013,593 | |||||||||
OK | Oklahoma City (Bunzl) | 2017 | Industrial | 110,361 | 5,537,962 | |||||||||
OK | Oklahoma City (FDX Ground) | 2012 | Industrial | 158,340 | 3,416,097 | |||||||||
OK | Tulsa | 2014 | Industrial | 46,240 | 1,685,288 | |||||||||
PA | Altoona (1) | 2014 | Industrial | 122,522 | 3,253,281 | |||||||||
PA | Imperial (Pittsburgh) | 2016 | Industrial | 125,860 | 11,199,661 | |||||||||
PA | Monaca (Pittsburgh) | 1977 | Industrial | 255,658 | -0- | |||||||||
SC | Aiken (Augusta, GA) | 2017 | Industrial | 315,560 | 14,471,117 | |||||||||
SC | Charleston (FDX) | 2018 | Industrial | 121,683 | 13,683,131 | |||||||||
SC | Charleston (FDX Ground) | 2018 | Industrial | 265,318 | 29,860,000 | |||||||||
SC | Ft. Mill (Charlotte, NC) | 2010 | Industrial | 176,939 | 724,766 | |||||||||
SC | Hanahan (Charleston) (SAIC) | 2005 | Industrial | 302,400 | -0- | |||||||||
SC | Hanahan (Charleston) (FDX Ground) | 2005 | Industrial | 91,776 | 465,749 | |||||||||
TN | Chattanooga | 2007 | Industrial | 60,637 | -0- | |||||||||
TN | Lebanon (Nashville) | 2011 | Industrial | 381,240 | 7,217,469 | |||||||||
TN | Memphis | 2010 | Industrial | 449,900 | 5,061,376 | |||||||||
TN | Shelby County | 2007 | Land | N/A | -0- | |||||||||
TX | Carrollton (Dallas) | 2010 | Industrial | 184,317 | 6,455,552 | |||||||||
TX | Corpus Christi | 2012 | Industrial | 46,253 | -0- | |||||||||
TX | Edinburg | 2011 | Industrial | 164,207 | -0- | |||||||||
TX | El Paso | 2006 | Industrial | 144,149 | -0- | |||||||||
TX | Ft. Worth (Dallas) | 2015 | Industrial | 304,608 | 20,753,864 | |||||||||
TX | Houston | 2010 | Industrial | 91,295 | 2,148,201 | |||||||||
TX | Lindale (Tyler) | 2015 | Industrial | 163,378 | 5,638,258 | |||||||||
TX | Mesquite (Dallas) | 2017 | Industrial | 351,874 | 30,928,224 | |||||||||
TX | Spring (Houston) | 2014 | Industrial | 181,176 | 7,924,865 | |||||||||
TX | Waco | 2012 | Industrial | 150,710 | 4,234,777 | |||||||||
VA | Charlottesville | 1999 | Industrial | 48,064 | -0- | |||||||||
VA | Mechanicsville (Richmond) | 2001 | Industrial | 112,799 | -0- | |||||||||
VA | Richmond | 2004 | Industrial | 60,000 | -0- | |||||||||
VA | Roanoke (CHEP USA) | 2007 | Industrial | 83,000 | -0- | |||||||||
VA | Roanoke (FDX Ground) | 2013 | Industrial | 103,402 | 4,395,246 | |||||||||
WA | Burlington (Seattle/Everett) | 2016 | Industrial | 210,445 | 17,757,364 | |||||||||
WI | Cudahy (Milwaukee) | 2001 | Industrial | 139,564 | -0- | |||||||||
WI | Green Bay (1) | 2013 | Industrial | 99,102 | 2,640,432 | |||||||||
21,173,581 | $ | 719,768,355 |
(1) | One loan is secured by the properties located in Green Bay, WI, Stewartville, MN and Altoona, PA. | |
(2) | ||
We own a 67% controlling equity interest. |
21 |
The following table sets forth certain information concerning the principal tenants and leases for our properties shown above as of September 30, 2018:2021:
State | City (MSA) | Tenant | Annualized Rent | Lease Expiration | City (MSA) | Tenant | Annualized Rent (in thousands) | Lease Expiration | ||||||||||||||||
AL | Huntsville | FedEx Ground Package System, Inc. | $ | 605,000 | 07/31/26 | Huntsville | FedEx Ground Package System, Inc. | $ | 605 | 07/31/26 | ||||||||||||||
AL | Mobile | Amazon.com Services, Inc. (Amazon.com. Inc.) | 2,020,000 | 11/30/28 | Mobile | Amazon.com Services, Inc. (Amazon.com, Inc.) | 2,065 | 11/30/28 | ||||||||||||||||
AZ | Tolleson (Phoenix) | Western Container Corp. (Coca-Cola) | 1,361,000 | 04/30/27 | Tolleson (Phoenix) | Western Container Corp. (Coca-Cola) | 1,409 | 04/30/27 | ||||||||||||||||
CO | Colorado Springs | FedEx Ground Package System, Inc. | 1,832,000 | 01/31/26 | Colorado Springs | FedEx Ground Package System, Inc. | 1,832 | 01/31/26 | ||||||||||||||||
CO | Denver | FedEx Ground Package System, Inc. | 605,000 | 10/31/25 | (1) | Denver | FedEx Ground Package System, Inc. | 609 | 10/31/25 | |||||||||||||||
CT | Newington (Hartford) | Kellogg Sales Company | 329,000 | 02/29/20 | Newington (Hartford) | Hartford HealthCare Corporation | 307 | 04/30/31 | ||||||||||||||||
FL | Cocoa | FedEx Ground Package System, Inc. | 1,112,000 | 09/30/24 | Cocoa | FedEx Ground Package System, Inc. | 1,112 | 09/30/24 | ||||||||||||||||
FL | Davenport (Orlando) | FedEx Ground Package System, Inc. | 2,609,000 | 04/30/31 | Davenport (Orlando) | FedEx Ground Package System, Inc. | 2,625 | 04/30/31 | ||||||||||||||||
FL | Daytona Beach | B. Braun Medical Inc. | 2,130,000 | 04/01/28 | Daytona Beach | B. Braun Medical Inc. | 2,330 | 02/28/33 | ||||||||||||||||
FL | Ft. Myers | FedEx Ground Package System, Inc. | 1,418,000 | 08/31/27 | Ft. Myers | FedEx Ground Package System, Inc. | 1,418 | 08/31/27 | ||||||||||||||||
FL | Homestead (Miami) | FedEx Ground Package System, Inc. | 2,282,000 | 03/31/32 | Homestead (Miami) | FedEx Ground Package System, Inc. | 2,282 | 03/31/32 | ||||||||||||||||
FL | Jacksonville | FedEx Corporation | 533,000 | 05/31/29 | (1) | Jacksonville | FedEx Corporation | 536 | 05/31/29 | |||||||||||||||
FL | Jacksonville | FedEx Ground Package System, Inc. | 1,998,000 | 12/31/29 | Jacksonville | FedEx Ground Package System, Inc. | 1,998 | 12/31/29 | ||||||||||||||||
FL | Lakeland | FedEx Corporation | 155,000 | 11/30/27 | (1) | Lakeland | FedEx Corporation | 155 | 11/30/27 | |||||||||||||||
FL | Orlando | FedEx Corporation | 666,000 | 11/30/27 | (1) | Orlando | FedEx Corporation | 666 | 11/30/27 | |||||||||||||||
FL | Punta Gorda | FedEx Corporation | 284,000 | 06/30/27 | Punta Gorda | FedEx Corporation | 284 | 06/30/27 | ||||||||||||||||
FL | Tampa | FedEx Corporation | 603,000 | 11/30/27 | Tampa | FedEx Ground Package System, Inc. | 1,624 | 07/31/26 | ||||||||||||||||
FL | Tampa | FedEx Ground Package System, Inc. | 1,624,000 | 07/31/26 | Tampa | FedEx Corporation | 603 | 11/30/27 | ||||||||||||||||
FL | Tampa | Tampa Bay Grand Prix | 297,000 | 09/30/20 | Tampa | Tampa Bay Grand Prix | 369 | 09/30/27 | ||||||||||||||||
GA | Augusta | FedEx Ground Package System, Inc. | 501,000 | 06/30/21 | (1) | Augusta | FedEx Ground Package System, Inc. | 513 | 06/30/23 | (1) | ||||||||||||||
GA | Augusta | FedEx Corporation | 121,000 | 11/30/22 | Augusta | FedEx Corporation | 121 | 11/30/22 | ||||||||||||||||
GA | Braselton (Atlanta) | FedEx Ground Package System, Inc. | 3,801,000 | 02/28/33 | Braselton (Atlanta) | FedEx Ground Package System, Inc. | 3,801 | 02/28/33 | ||||||||||||||||
GA | Griffin (Atlanta) | Rinnai America Corporation | 831,000 | 12/31/20 | Griffin (Atlanta) | Rinnai America Corporation | 913 | 12/31/22 | (1) | |||||||||||||||
GA | Savannah | Shaw Industries, Inc. | 3,551,000 | 09/30/27 | Locust Grove (Atlanta) | Home Depot U.S.A., Inc. | 5,458 | 11/30/40 | ||||||||||||||||
GA | Savannah | Shaw Industries, Inc. | 3,563 | 09/30/27 | ||||||||||||||||||||
GA | Savannah | FedEx Ground Package System, Inc. | 1,765 | 10/31/28 | ||||||||||||||||||||
IA | Urbandale (Des Moines) | Foundation Building Materials, LLC | 172,000 | 12/31/27 | (2) | Urbandale (Des Moines) | Foundation Building Materials, LLC | 179 | 12/31/27 | (2) | ||||||||||||||
IL | Burr Ridge (Chicago) | Sherwin-Williams Company | 162,000 | 10/31/21 | Burr Ridge (Chicago) | Sherwin-Williams Company | 162 | 10/31/26 | (1) | |||||||||||||||
IL | Elgin (Chicago) | Joseph T. Ryerson and Son, Inc. | 506,000 | 01/31/20 | Elgin (Chicago) | Joseph T. Ryerson and Son, Inc. | 519 | 01/31/25 | ||||||||||||||||
IL | Granite City (St. Louis, MO) | Anheuser-Busch, Inc. | 821,000 | 11/30/21 | Granite City (St. Louis, MO) | Anheuser-Busch, Inc. | 954 | 03/31/22 | (3) | |||||||||||||||
IL | Montgomery (Chicago) | Home Depot USA, Inc. | 997,000 | 06/30/20 | Montgomery (Chicago) | Home Depot U.S.A., Inc. | 1,079 | 12/31/22 | ||||||||||||||||
IL | Rockford | Collins Aerospace Systems (United Technologies) | 364,000 | 06/30/27 | (3) | Rockford | Collins Aerospace Systems (Raytheon Technologies Corp) | 368 | 06/30/27 | (4) | ||||||||||||||
IL | Rockford | Sherwin-Williams Company | 481,000 | 12/31/23 | Rockford | Sherwin-Williams Company | 486 | 12/31/23 | ||||||||||||||||
IL | Sauget (St. Louis, MO) | FedEx Ground Package System, Inc. | 1,036,000 | 05/31/29 | Sauget (St. Louis, MO) | FedEx Ground Package System, Inc. | 1,036 | 05/31/29 | ||||||||||||||||
IL | Schaumburg (Chicago) | FedEx Corporation | 478,000 | 03/31/27 | Schaumburg (Chicago) | FedEx Corporation | 478 | 03/31/27 | ||||||||||||||||
IL | Wheeling (Chicago) | FedEx Ground Package System, Inc. | 1,272,000 | 05/31/27 | Wheeling (Chicago) | FedEx Ground Package System, Inc. | 1,272 | 05/31/27 | ||||||||||||||||
IN | Greenwood (Indianapolis) | ULTA, Inc. | 2,782 | 07/31/25 | ||||||||||||||||||||
IN | Indianapolis | FedEx Ground Package System, Inc. | 1,717 | 10/31/27 | ||||||||||||||||||||
IN | Greenwood (Indianapolis) | ULTA, Inc. | 2,702,000 | 07/31/25 | Greenwood (Indianapolis) | Amazon.com.indc, LLC (Amazon.com, Inc.) | 4,991 | 08/31/34 | ||||||||||||||||
IN | Indianapolis | FedEx Ground Package System, Inc. | 1,715,000 | 10/31/27 | Lafayette | Toyota Tsusho America, Inc. | 1,722 | 06/30/29 | ||||||||||||||||
KS | Edwardsville (Kansas City) | Carlisle Tire & Wheel Company | 739,000 | 07/31/23 | (1) | Edwardsville (Kansas City) | Carlstar Group, LLC | 771 | 07/31/23 | |||||||||||||||
KS | Edwardsville (Kansas City) | International Paper Company | 1,348,000 | 08/31/23 | Edwardsville (Kansas City) | International Paper Company | 1,382 | 08/31/23 | ||||||||||||||||
KS | Olathe (Kansas City) | FedEx Ground Package System, Inc. | 2,200,000 | 05/31/31 | Olathe (Kansas City) | FedEx Ground Package System, Inc. | 2,553 | 05/31/31 | ||||||||||||||||
KS | Topeka | Heartland Coca-Cola Bottling Co., LLC (Coca-Cola) | 332,000 | 09/30/21 | Topeka | Heartland Coca-Cola Bottling Co., LLC (Coca-Cola) | 292 | 09/30/26 | (1) | |||||||||||||||
KY | Buckner (Louisville) | TreeHouse Private Brands, Inc. | 2,206,000 | 10/31/33 | Buckner (Louisville) | TreeHouse Private Brands, Inc. | 2,267 | 10/31/33 | ||||||||||||||||
KY | Frankfort (Lexington) | Jim Beam Brands Company (Beam Suntory) | 2,051,000 | 01/31/25 | Frankfort (Lexington) | Jim Beam Brands Company (Beam Suntory) | 2,112 | 01/31/25 | ||||||||||||||||
KY | Louisville | Challenger Lifts, Inc. (Snap-on Inc.) | 838,000 | 06/07/26 | Louisville | Challenger Lifts, Inc. (Snap-on Inc.) | 858 | 06/07/26 | ||||||||||||||||
LA | Covington (New Orleans) | FedEx Ground Package System, Inc. | 1,262,000 | 06/30/25 | Covington (New Orleans) | FedEx Ground Package System, Inc. | 1,274 | 06/30/25 | ||||||||||||||||
MD | Beltsville (Washington, DC) | FedEx Ground Package System, Inc. | 1,452,000 | 07/31/28 | (1) | Beltsville (Washington, DC) | FedEx Ground Package System, Inc. | 1,455 | 07/31/28 | |||||||||||||||
MI | Livonia (Detroit) | FedEx Ground Package System, Inc. | 1,194,000 | 03/31/22 | Livonia (Detroit) | FedEx Ground Package System, Inc. | 1,194 | 03/31/22 | ||||||||||||||||
MI | Orion | FedEx Ground Package System, Inc. | 1,908,000 | 06/30/23 | Orion | FedEx Ground Package System, Inc. | 1,908 | 06/30/23 | ||||||||||||||||
MI | Romulus (Detroit) | FedEx Corporation | 370,000 | 05/31/21 | Romulus (Detroit) | FedEx Corporation | 421 | 05/31/26 | (1) | |||||||||||||||
MI | Walker (Grand Rapids) | FedEx Ground Package System, Inc. | 2,102,000 | 01/31/32 | Walker (Grand Rapids) | FedEx Ground Package System, Inc. | 2,106 | 01/31/32 | ||||||||||||||||
MN | Stewartville (Rochester) | FedEx Ground Package System, Inc. | 372,000 | 05/30/23 | Stewartville (Rochester) | FedEx Ground Package System, Inc. | 372 | 05/31/23 | ||||||||||||||||
MO | Kansas City | Bunzl Distribution Midcentral, Inc. | 752,000 | 09/30/21 | Kansas City | Bunzl Distribution Midcentral, Inc. | 714 | 09/30/26 | (1) | |||||||||||||||
MO | Liberty (Kansas City) | Holland 1916 Inc. | 349,000 | 06/30/19 | Liberty (Kansas City) | Dakota Bodies, LLC | 416 | 04/30/26 | ||||||||||||||||
MO | O’Fallon (St. Louis) | Pittsburgh Glass Works, LLC | 442,000 | 06/30/21 | (1) | O’Fallon (St. Louis) | Pittsburgh Glass Works, LLC, a Division of VITRO | 508 | 06/30/26 | (1)(5) | ||||||||||||||
MO | St. Joseph | Woodstream Corporation | 914,000 | 09/30/21 | (4) | St. Joseph | Woodstream Corporation | 987 | 09/30/26 | (1)(6) | ||||||||||||||
MO | St. Joseph | Altec Industries, Inc. | 371,000 | 02/28/23 | (1)(4) | St. Joseph | Altec Industries, Inc. | 378 | 02/28/23 | (6) | ||||||||||||||
MS | Olive Branch (Memphis, TN) | Anda Pharmaceuticals, Inc. | 1,205,000 | 07/31/22 | Olive Branch (Memphis, TN) | Anda Pharmaceuticals, Inc. | 1,220 | 07/31/22 | ||||||||||||||||
MS | Olive Branch (Memphis, TN) | Milwaukee Electric Tool Corporation | 3,098 | 07/31/28 | ||||||||||||||||||||
MS | Richland (Jackson) | FedEx Corporation | 120 | 03/31/24 | ||||||||||||||||||||
MS | Ridgeland (Jackson) | Graybar Electric Company | 122 | 07/31/25 | ||||||||||||||||||||
NC | Concord (Charlotte) | FedEx Ground Package System, Inc. | 2,237 | 07/31/25 | ||||||||||||||||||||
NC | Concord (Charlotte) | FedEx Ground Package System, Inc. | 2,537 | 05/31/32 | ||||||||||||||||||||
NC | Fayetteville | Victory Packaging, L.P. | 504 | 02/28/25 | (1) | |||||||||||||||||||
NC | Whitsett (Greensboro) | FedEx Ground Package System, Inc. | 3,002 | 04/30/35 | ||||||||||||||||||||
NC | Winston-Salem | Style Crest, Inc. | 433 | 03/31/26 | (1) | |||||||||||||||||||
NE | Omaha | FedEx Corporation | 446 | 10/31/23 | ||||||||||||||||||||
NJ | Somerset | Various Tenants at Retail Shopping Center | 616 | Various | (7) |
22 |
State | City (MSA) | Tenant | Annualized Rent | Lease Expiration | ||||||||
MS | Olive Branch (Memphis, TN) | Milwaukee Electric Tool Corporation | $ | 3,032,000 | 07/31/28 | |||||||
MS | Richland (Jackson) | FedEx Corporation | 120,000 | 03/31/24 | ||||||||
MS | Ridgeland (Jackson) | Graybar Electric Company | 109,000 | 07/31/19 | (5) | |||||||
NC | Concord (Charlotte) | FedEx Ground Package System, Inc. | 2,237,000 | 07/31/25 | ||||||||
NC | Concord (Charlotte) | FedEx Ground Package System, Inc. | 2,537,000 | 05/31/32 | ||||||||
NC | Fayetteville | Victory Packaging, L.P. | 502,000 | 02/28/21 | ||||||||
NC | Winston-Salem | Style Crest, Inc. | 387,000 | 03/31/21 | ||||||||
NE | Omaha | FedEx Corporation | 446,000 | 10/31/23 | ||||||||
NJ | Carlstadt (New York, NY) | SOFIVE, Inc. | 558,000 | 01/31/25 | (6) | |||||||
NJ | Somerset | Various Tenants at Retail Shopping Center | 807,000 | Various | (7) | |||||||
NY | Cheektowaga (Buffalo) | FedEx Ground Package System, Inc. | 966,000 | 08/31/19 | ||||||||
NY | Halfmoon (Albany) | RGH Enterprises, Inc. (Cardinal Health) | 607,000 | 11/30/21 | ||||||||
NY | Hamburg (Buffalo) | FedEx Ground Package System, Inc. | 2,313,000 | 03/31/31 | ||||||||
OH | Bedford Heights (Cleveland) | FedEx Corporation | 436,000 | 08/31/28 | (1) | |||||||
OH | Cincinnati | The American Bottling Company (Keurig Dr Pepper) | 481,000 | 09/30/29 | ||||||||
OH | Kenton | International Paper Company | 1,244,000 | 08/31/27 | ||||||||
OH | Lebanon (Cincinnati) | Siemens Real Estate | 464,000 | 04/30/24 | (1)(8) | |||||||
OH | Monroe (Cincinnati) | UGN, Inc. | 1,070,000 | 02/28/30 | ||||||||
OH | Richfield (Cleveland) | FedEx Ground Package System, Inc. | 1,493,000 | 09/30/24 | ||||||||
OH | Stow | Mickey Thompson (Cooper Tire) | 1,501,000 | 08/31/27 | ||||||||
OH | Streetsboro (Cleveland) | Best Buy Warehousing Logistics, Inc. | 1,676,000 | 01/31/22 | ||||||||
OH | West Chester Twp. (Cincinnati) | FedEx Ground Package System, Inc. | 543,000 | 08/31/23 | ||||||||
OK | Oklahoma City | Amazon.com Services, Inc. (Amazon.com. Inc.) | 1,884,000 | 10/31/27 | ||||||||
OK | Oklahoma City | Bunzl Distribution Oklahoma, Inc. | 722,000 | 08/31/24 | ||||||||
OK | Oklahoma City | FedEx Ground Package System, Inc. | 1,048,000 | 06/30/25 | ||||||||
OK | Tulsa | The American Bottling Company (Keurig Dr Pepper) | 262,000 | 02/28/24 | ||||||||
PA | Altoona | FedEx Ground Package System, Inc. | 651,000 | 08/31/23 | ||||||||
PA | Imperial (Pittsburgh) | General Electric Company | 1,321,000 | 12/31/25 | ||||||||
PA | Monaca (Pittsburgh) | NF&M International, Inc. | 835,000 | 12/31/24 | ||||||||
SC | Aiken (Augusta, GA) | Autoneum North America, Inc. | 1,703,000 | 04/30/32 | ||||||||
SC | Charleston | FedEx Corporation | 1,315,000 | 08/31/32 | ||||||||
SC | Charleston | FedEx Ground Package System, Inc. | 2,713,000 | 06/30/33 | ||||||||
SC | Ft. Mill (Charlotte, NC) | FedEx Ground Package System, Inc. | 1,581,000 | 08/31/28 | ||||||||
SC | Hanahan (Charleston) | FedEx Ground Package System, Inc. | 675,000 | 11/30/18 | (1)(9) | |||||||
SC | Hanahan (Charleston) | Science Applications International Corporation | 1,491,000 | 04/30/19 | ||||||||
TN | Chattanooga | FedEx Corporation | 319,000 | 10/31/22 | (1) | |||||||
TN | Lebanon (Nashville) | CBOCS Distribution, Inc. (Cracker Barrel) | 1,447,000 | 06/30/24 | ||||||||
TN | Memphis | FedEx Corporation | 1,384,000 | 05/31/29 | (8) | |||||||
TN | Shelby County | N/A- Land | -0- | N/A | ||||||||
TX | Carrollton (Dallas) | Carrier Enterprise, LLC (United Technologies) | 1,241,000 | 01/31/24 | (1) | |||||||
TX | Corpus Christi | FedEx Ground Package System, Inc. | 436,000 | 08/31/21 | ||||||||
TX | Edinburg | FedEx Ground Package System, Inc. | 1,097,000 | 09/30/26 | ||||||||
TX | El Paso | FedEx Ground Package System, Inc. | 1,345,000 | 09/30/23 | ||||||||
TX | Ft. Worth (Dallas) | FedEx Ground Package System, Inc. | 2,373,000 | 04/30/30 | ||||||||
TX | Houston | National Oilwell Varco, Inc. | 754,000 | 09/30/22 | ||||||||
TX | Lindale (Tyler) | FedEx Ground Package System, Inc. | 725,000 | 06/30/24 | ||||||||
TX | Mesquite (Dallas) | FedEx Ground Package System, Inc. | 3,195,000 | 03/31/32 | ||||||||
TX | Spring (Houston) | FedEx Ground Package System, Inc. | 1,581,000 | 09/30/24 | ||||||||
TX | Waco | FedEx Ground Package System, Inc. | 1,078,000 | 08/31/25 | ||||||||
VA | Charlottesville | FedEx Corporation | 329,000 | 08/31/27 | ||||||||
VA | Mechanicsville (Richmond) | FedEx Corporation | 541,000 | 04/30/23 | ||||||||
VA | Richmond | Carrier Enterprise, LLC (United Technologies) | 324,000 | 11/30/18 | (9) | |||||||
VA | Roanoke | CHEP USA, Inc. | 500,000 | 02/28/25 | (10) | |||||||
VA | Roanoke | FedEx Ground Package System, Inc. | 755,000 | 04/30/23 | ||||||||
WA | Burlington (Seattle/Everett) | FedEx Ground Package System, Inc. | 1,962,000 | 08/31/30 | ||||||||
WI | Cudahy (Milwaukee) | FedEx Ground Package System, Inc. | 827,000 | 06/30/27 | ||||||||
WI | Green Bay | FedEx Ground Package System, Inc. | 468,000 | 05/30/23 | ||||||||
$ | 126,792,000 |
State | City (MSA) | Tenant | Annualized Rent (in thousands) | Lease Expiration | ||||||||
NJ | Trenton | FedEx Ground Package System, Inc. | $ | 5,328 | 06/30/32 | |||||||
NY | Cheektowaga (Buffalo) | Sonwil Distribution Center, Inc. | 630 | 01/31/22 | (8) | |||||||
NY | Halfmoon (Albany) | United Parcel Service, Inc. | 595 | 03/31/31 | (9) | |||||||
NY | Hamburg (Buffalo) | FedEx Ground Package System, Inc. | 2,329 | 03/31/31 | ||||||||
OH | Bedford Heights (Cleveland) | FedEx Corporation | 438 | 08/31/28 | ||||||||
OH | Cincinnati | The American Bottling Company (Keurig Dr Pepper) | 488 | 09/30/29 | ||||||||
OH | Lancaster (Columbus) | Magna Seating of America, Inc. | 1,201 | 01/31/30 | ||||||||
OH | Kenton | International Paper Company | 1,281 | 08/31/27 | ||||||||
OH | Lebanon (Cincinnati) | Siemens Real Estate | 464 | 04/30/24 | ||||||||
OH | Monroe (Cincinnati) | UGN, Inc. | 2,107 | 02/28/34 | ||||||||
OH | Plain City (Columbus) | FedEx Ground Package System, Inc. | 4,569 | 09/30/35 | ||||||||
OH | Richfield (Cleveland) | FedEx Ground Package System, Inc. | 1,493 | 09/30/24 | ||||||||
OH | Stow | Mickey Thompson (Cooper Tire) | 1,537 | 08/31/27 | ||||||||
OH | Streetsboro (Cleveland) | Best Buy Warehousing Logistics, Inc. | 1,725 | 01/31/22 | ||||||||
OH | West Chester Twp. (Cincinnati) | FedEx Ground Package System, Inc. | 560 | 08/31/23 | ||||||||
OK | Oklahoma City | Amazon.com Services, Inc. (Amazon.com, Inc.) | 1,948 | 10/31/27 | ||||||||
OK | Oklahoma City | Amazon.com Services, LLC (Amazon.com, Inc.) | 935 | 08/31/30 | ||||||||
OK | Oklahoma City | Bunzl Distribution Oklahoma, Inc. | 743 | 08/31/24 | ||||||||
OK | Oklahoma City | FedEx Ground Package System, Inc. | 1,048 | 07/31/25 | ||||||||
OK | Tulsa | The American Bottling Company (Keurig Dr Pepper) | 269 | 02/28/24 | ||||||||
PA | Altoona | FedEx Ground Package System, Inc. | 651 | 08/31/23 | ||||||||
PA | Imperial (Pittsburgh) | General Electric Company | 1,329 | 12/31/30 | ||||||||
PA | Monaca (Pittsburgh) | NF&M International, Inc. | 795 | 03/31/25 | ||||||||
SC | Aiken (Augusta, GA) | Autoneum North America, Inc. | 1,746 | 04/30/32 | ||||||||
SC | Charleston | FedEx Corporation | 1,314 | 08/31/32 | ||||||||
SC | Charleston | FedEx Ground Package System, Inc. | 2,713 | 06/30/33 | ||||||||
SC | Ft. Mill (Charlotte, NC) | FedEx Ground Package System, Inc. | 1,598 | 08/31/28 | ||||||||
SC | Hanahan (Charleston) | Science Applications International Corporation | 1,708 | 10/31/23 | ||||||||
SC | Hanahan (Charleston) | Amazon Services, Inc. (Amazon.com, Inc.) | 803 | 06/30/29 | ||||||||
TN | Chattanooga | FedEx Corporation | 319 | 10/31/22 | ||||||||
TN | Kodak (Knoxville) | FedEx Ground Package System, Inc. | 1,979 | 05/31/36 | ||||||||
TN | Lebanon (Nashville) | CBOCS Distribution, Inc. (Cracker Barrel) | 1,490 | 06/30/24 | ||||||||
TN | Memphis | FedEx Trade Networks | 1,394 | 05/31/29 | ||||||||
TN | Shelby County | N/A- Land | -0- | N/A | ||||||||
TX | Carrollton (Dallas) | Carrier Enterprise, LLC (Carrier Global Corporation) | 1,160 | 01/31/24 | ||||||||
TX | Corpus Christi | FedEx Ground Package System, Inc. | 454 | 08/31/26 | (1) | |||||||
TX | Edinburg | FedEx Ground Package System, Inc. | 1,097 | 09/30/26 | ||||||||
TX | El Paso | FedEx Ground Package System, Inc. | 1,345 | 09/30/23 | ||||||||
TX | Ft. Worth (Dallas) | FedEx Ground Package System, Inc. | 2,394 | 04/30/30 | ||||||||
TX | Houston | National Oilwell Varco, Inc. | 801 | 09/30/29 | (1) | |||||||
TX | Lindale (Tyler) | FedEx Ground Package System, Inc. | 725 | 06/30/24 | ||||||||
TX | Mesquite (Dallas) | FedEx Ground Package System, Inc. | 3,209 | 03/31/32 | ||||||||
TX | Spring (Houston) | FedEx Ground Package System, Inc. | 1,581 | 09/30/24 | ||||||||
TX | Waco | FedEx Ground Package System, Inc. | 1,078 | 08/31/25 | ||||||||
UT | Ogden (Salt Lake City) | FedEx Corporation | 772 | 03/31/35 | ||||||||
VA | Charlottesville | FedEx Corporation | 329 | 08/31/27 | ||||||||
VA | Mechanicsville (Richmond) | FedEx Corporation | 541 | 04/30/23 | ||||||||
VA | Richmond | Locke Supply Co. | 340 | 04/30/32 | ||||||||
VA | Roanoke | CHEP USA, Inc. | 509 | 02/28/25 | ||||||||
VA | Roanoke | FedEx Ground Package System, Inc. | 755 | 04/30/23 | ||||||||
VT | Burlington | FedEx Ground Package System, Inc. | 3,233 | 05/31/36 | ||||||||
WA | Burlington (Seattle/Everett) | FedEx Ground Package System, Inc. | 1,962 | 08/31/30 | ||||||||
WI | Cudahy (Milwaukee) | FedEx Ground Package System, Inc. | 827 | 06/30/27 | ||||||||
WI | Green Bay | FedEx Ground Package System, Inc. | 468 | 05/31/23 | ||||||||
$ | 164,118 |
(1) | ||
(2) | The lease has a one-time early termination option which may be exercised on 12/31/25, on the condition that we are provided with six months’ notice and the tenant pays us a $95,000 termination fee. | |
(3) | Lease was set to expire 11/30/21 and was renewed for four months through 3/31/22 at 150% of the prior rental rate. | |
(4) | The lease has an early termination option which may be exercised after | |
Property is leased to two tenants. | ||
We own a 67% controlling equity interest. Estimated annual rent reflects our proportionate share of the total rent. | ||
(8) | Not reflected in the table above. The current tenant is not renewing its lease. We | |
(9) | ||
23 |
As of September 30, 2018,2021, all improvedbut one of our industrial properties were 100% occupied, except for one property located in Monaca (Pittsburgh), PA consisting of 255,658 rentable square feet of which 68% or 174,802 square feet is occupied, resulting in a 99.6%99.7% overall occupancy percentage for our whole portfolio of properties.rate.
Our weighted-averageweighted average lease expiration was 8.17.0 years and 7.97.1 years as of September 30, 20182021 and 2017,2020, respectively. Our weighted average lease expiration has been 7.0 years or greater for over seven consecutive years.
Our averageoverall occupancy rates as of the years ended September 30, 2021, 2020, 2019, 2018 and 2017 2016, 2015 and 2014 were 99.6%99.7%, 99.3%99.4%, 98.9%, 99.6%, 97.7% and 95.9%99.3%, respectively. The weighted average effective annualized rent per square foot for the years ended September 30, 2021, 2020, 2019, 2018 and 2017 2016, 2015was $6.61, $6.36, $6.20, $6.01 and 2014 was $6.01, $5.93, $5.72, $5.48 and $5.51, respectively. Our overall occupancy rate has been 98.9% or above for over six consecutive years.
Completed expansions that have resulted in increased rents over the fiscal years ended September 30, 20172020 and 20182021
Ecommerce has been a major catalyst driving increased demand for the industrial property type. The shift from traditional brick and mortar retail shopping to ordering goods on-line has resulted in record occupancy rates for industrial real estate throughout the U.S. Due to thethis increased demand, for industrial space, we have been experiencing an increase in expansion activity at our existing properties.
On October 1, 2016,During fiscal 2021, we completed the first phase of a 50,625 square foottwo-phase parking expansion of the building leased toproject for FedEx Ground Package System, Inc. at our property located in Edinburg, TXOlathe (Kansas City), KS. The first phase of this parking expansion project was completed for a total cost of $3.4 million, resulting in an initial increase in annual rent effective November 5, 2020 of approximately $340,000 from approximately $2.1 million, or $6.83 per square foot, to approximately $2.5 million, or $7.91 per square foot. Furthermore, annual rent increased by 2.1% on June 1, 2021 and will continue to increase 2.1% every five years, resulting in an annualized rent from November 5, 2021 through the remaining term of the lease of approximately $2.6 million, or $8.15 per square foot. We recently began construction on the second phase of this parking expansion project at this location, which upon completion will further increase the rental rate and extend the lease term.
In addition, effective June 4, 2021, we completed a parking lot expansion for UPS at our property located in Halfmoon (Albany), NY for a cost of approximately $4,762,000,$835,000, resulting in a new 10 year lease which extended the prior lease expiration date from September 2021 to September 2026. In addition, the expansion resulted in an initial increase in annual rent effective fromon the date of completion of approximately $499,000$52,000 from approximately $598,000,$510,000, or $5.26$6.80 per square foot, to approximately $1,097,000,$562,000, or $6.68$7.50 per square foot. Furthermore, annual rent will continue to increase each year by 2.0% resulting in an annualized rent from June 4, 2021 through the remaining term of the lease of approximately $622,000, or $8.29 per square foot.
On September 1, 2017, aWe have several FedEx Ground parking expansion projects in progress with more under discussion. Currently there are nine parking expansion projects underway, which we expect to cost approximately $42.6 million. These parking expansion projects will enable us to capture additional rent while lengthening the terms of these leases. We are also in discussions to expand the parking at eight additional locations bringing the total recently completed and likely future parking lot expansion projects to 18 currently.
Due to the proliferation of ecommerce sales and last mile deliveries, it is important to take into account the large amounts of real estate utilized for trailer, van, and car parking at many of our properties in determining how our in-place rental rates compare to market rental rates for properties being used in a property leasedsimilar manner. Rents per square foot on properties that may be nearby, but have only limited acreage devoted to FedEx Ground Package System, Inc. located in Ft. Myers, FLparking, are poor comparisons as they cannot accommodate the same tenant needs.
Fiscal 2021 Renewals
In fiscal 2021, approximately 5% of our gross leasable area, representing ten leases totaling 1.2 million square feet, was completed for a costset to expire. All ten of approximately $862,000,these leases have been renewed, resulting in a new 10 year lease which extended the prior lease expiration date from September 2026 to August 2027. In addition, the expansion resulted in100% retention rate for a weighted average term of 4.2 years, at a rental rate increase of 6.2% on a U.S. GAAP basis and an increase in annual rent effective from the date of completion of approximately $53,000 from approximately $1,365,000, or $6.39 per square foot to approximately $1,418,000, or $6.64 per square foot.0.4% on a cash basis.
On November 1, 2017, a parking lot expansion for a property leased to FedEx Ground Package System, Inc., located in Indianapolis, IN was completed for a total project cost of approximately $1,683,000, resulting in a new 10 year lease which extended the prior lease expiration date from April 2024 to October 2027. In addition, the expansion resulted in an increase in annual rent effective from the date of completion of approximately $184,000 from approximately $1,533,000, or $4.67 per square foot, to approximately $1,715,000, or $5.23 per square foot.
On September 27, 2018, a parking lot expansion for a property leased to FedEx Ground Package System, Inc., located in Ft. Mill, SC was completed for a total project cost of approximately $1,834,000, resulting in a new 10 year lease which extended the prior lease expiration date from October 2023 to August 2028. In addition, the expansion resulted in an increase in annual rent effective from the date of completion of approximately $183,000 from approximately $1,415,000, or $8.00 per square foot, to approximately $1,598,000, or $9.03 per square foot.
24 |
Fiscal 2018 Renewals
In fiscal 2018, approximately 8% of our gross leasable area, representing 16 leases totaling 1,546,637 square feet, was set to expire. We have renewed 11incurred or we expect to incur leasing commission costs of the 16 leases that were set to expire during fiscal 2018, representing 1,063,824 square feet, or 69%$621,000 in connection with six of the expiring square footage. One of the 11 leases, which is with FedEx Ground Package System, Inc., for a property located in Hanahan (Charleston), SC, renewed for only four months, until November 30, 2018, because the tenant moved their operations from our 91,776 square foot facility to our newly constructed, much larger, 265,318 square foot facility, which is also located in Charleston, SCthese lease renewals and is leased to FedEx Ground Package System, Inc. for 15 years through June 2033. We closed on this new facility on August 15, 2018. Excluding the four month lease renewal at the 91,776 square foot location, the 10 leases that have renewed represent 972,048 square feet, or 63% of the expiring square footage. Wewe have incurred or we expect to incur tenant improvement costs of approximately $844,000 and leasing commission costs of approximately $898,000$756,000 in connection with five of these 10 lease renewals. The table below summarizes the lease terms of the 11 leases whichthat were renewed. In addition, the table below includes both the tenant improvement costs and the leasing commission costs, which are presented on a per square foot (PSF) basis averaged annually over the renewal term.terms.
Property | Tenant | Square Feet | Former U.S. GAAP Straight- Line Rent PSF | Former Cash Rent PSF | Former Lease Expiration | Renewal U.S GAAP Straight- Line Rent PSF | Renewal Initial Cash Rent PSF | Renewal Lease Expiration | Renewal Term (years) | Tenant Improvement Cost PSF over Renewal Term (1) | Leasing Commission Cost PSF over Renewal Term (1) | |||||||||||||||||||||||||||
Griffin (Atlanta), GA | Rinnai America Corporation | 218,120 | $ | 3.81 | $ | 3.93 | 12/31/20 | $ | 4.22 | $ | 4.22 | 12/31/22 | 2.0 | $ | -0- | $ | 0.13 | |||||||||||||||||||||
Fayetteville, NC | Victory Packaging, L.P. | 148,000 | 3.33 | 3.50 | 2/28/21 | 3.40 | 3.25 | 2/28/25 | 4.0 | -0- | 0.20 | |||||||||||||||||||||||||||
Winston-Salem, NC | Style Crest, Inc. | 106,507 | 3.39 | 3.77 | 3/31/21 | 4.10 | 3.90 | 3/31/26 | 5.0 | 0.30 | -0- | |||||||||||||||||||||||||||
Romulus, MI | FedEx Corporation | 71,933 | 5.15 | 5.15 | 5/31/21 | 5.95 | 5.95 | 5/31/26 | 5.0 | 0.56 | 0.12 | |||||||||||||||||||||||||||
Augusta, GA | FedEx Ground | 59,358 | 8.64 | 8.64 | 6/30/21 | 8.64 | 8.64 | 6/30/23 | 2.0 | -0- | -0- | |||||||||||||||||||||||||||
O’Fallon, MO | Pittsburgh Glass Works, LLC | 102,135 | 4.37 | 4.44 | 6/30/21 | 5.05 | 4.88 | 6/30/26 | 5.0 | 0.20 | -0- | |||||||||||||||||||||||||||
Corpus Christi, TX | FedEx Ground | 46,253 | 9.03 | 9.42 | 8/31/21 | 9.89 | 9.89 | 8/31/26 | 5.0 | -0- | -0- | |||||||||||||||||||||||||||
Kansas City, MO | Bunzl Distribution | 158,417 | 4.65 | 4.86 | 9/30/21 | 4.44 | 4.26 | 9/30/26 | 5.0 | -0- | 0.27 | |||||||||||||||||||||||||||
St. Joseph, MO | Woodstream Corporation | 256,000 | 3.57 | 3.70 | 9/30/21 | 3.89 | 3.75 | 9/30/26 | 5.0 | 0.14 | 0.12 | |||||||||||||||||||||||||||
Topeka, KS | Coca-Cola Bottling Co., LLC | 40,000 | 8.30 | 8.30 | 9/30/21 | 7.10 | 6.75 | 9/30/26 | 5.0 | 0.60 | 0.21 | |||||||||||||||||||||||||||
Total | 1,206,723 | |||||||||||||||||||||||||||||||||||||
Weighted Average | $ | 4.49 | $ | 4.64 | $ | 4.77 | $ | 4.66 | 4.2 | $ | 0.15 | $ | 0.12 |
Property |
Tenant |
Square Feet | Former U.S. GAAP Straight- Line Rent PSF | Former Cash Rent PSF | Former Lease Expiration | Renewal U.S GAAP Straight- Line Rent PSF | Renewal Initial Cash Rent PSF | Renewal Lease Expiration | Renewal Term (years) | Tenant Improvement Cost PSF over Renewal Term (1) | Leasing Commission Cost PSF over Renewal Term (1) | |||||||||||||||||||||||||||
Hanahan (Charleston), SC (3) |
FedEx Ground | 91,776 | $ | 7.35 | $ | 7.35 | 07/31/18 | $ | 7.35 | $ | 7.35 | 11/30/18 | 0.3 | $ | -0- | $ | -0- | |||||||||||||||||||||
Chattanooga, TN | FedEx Express | 60,637 | $ | 5.13 | $ | 5.13 | 10/31/17 | $ | 5.26 | $ | 5.26 | 10/31/22 | 5.0 | $ | 0.44 | $ | 0.10 | |||||||||||||||||||||
Lakeland, FL | FedEx Express | 32,105 | 4.83 | 4.83 | 11/30/17 | 4.83 | 4.83 | 11/30/27 | 10.0 | 0.19 | 0.10 | |||||||||||||||||||||||||||
Orlando, FL | FedEx Express | 110,638 | 5.69 | 6.02 | 11/30/17 | 6.02 | 6.02 | 11/30/27 | 10.0 | 0.20 | 0.12 | |||||||||||||||||||||||||||
St. Joseph, MO | Altec Industries | 126,880 | 2.75 | 2.75 | 02/28/18 | 2.94 | 2.87 | 02/28/23 | 5.0 | -0- | 0.13 | |||||||||||||||||||||||||||
Edwardsville, KS | Carlisle Tire | 179,280 | 4.23 | 4.39 | 05/31/18 | 4.10 | 4.15 | 07/31/23 | 5.2 | 0.05 | 0.16 | |||||||||||||||||||||||||||
Augusta, GA | FedEx Ground | 59,358 | 7.64 | 7.64 | 06/30/18 | 8.64 | 8.64 | 06/30/21 | 3.0 | -0- | -0- | |||||||||||||||||||||||||||
O’Fallon, MO | Pittsburgh Glass Works | 102,135 | 4.18 | 4.18 | 06/30/18 | 4.37 | 4.31 | 06/30/21 | 3.0 | 0.08 | -0- | |||||||||||||||||||||||||||
Denver, CO | FedEx Ground | 69,865 | 8.08 | 8.08 | 07/31/18 | 8.72 | 8.72 | 10/31/25 | 7.3 | -0- | 0.17 | |||||||||||||||||||||||||||
Beltsville, MD | FedEx Ground | 148,881 | 9.58 | 9.58 | 07/31/18 | 9.77 | 9.77 | 07/31/28 | 10.0 | -0- | 0.20 | |||||||||||||||||||||||||||
Bedford Heights, OH | FedEx Express | 82,269 | 4.96 | 4.96 | 08/31/18 | 5.33 | 5.33 | 08/31/28 | 10.0 | 0.43 | 0.11 | |||||||||||||||||||||||||||
Total (2) | 972,048 | |||||||||||||||||||||||||||||||||||||
Weighted Average (2) | $ | 5.64 | $ | 5.71 | $ | 5.87 | $ | 5.87 | 6.8 | $ | 0.13 | $ | 0.14 |
(1) | Amount calculated based on the total cost divided by the square feet, divided by the renewal term. | |
Excluding the four-month lease renewal at the Hanahan (Charleston), SC location, the remaining 10These ten lease renewals result inhave a weighted average term of 6.8 years and a renewed U.S. GAAP straight-line weighted average lease rate of $5.87$4.77 per square foot. The renewed weighted average initial cash rent is also $5.87 per square foot.foot is $4.66. This compares to the former weighted average rent of $5.64$4.49 per square foot on a U.S. GAAP straight-line basis and the former weighted average cash rent of $5.71$4.64 per square foot, representingresulting in an increase in the weighted average lease rate of 4.1%6.2% on a U.S. GAAP straight-line basis and an increase of 2.8%0.4% on a cash basis.
As further described in the three paragraphs below, of the five remaining leases originally set to expire during fiscal 2018 that did not renew, three of the properties were sold and one of the properties was re-tenanted. The three properties that were sold represent 12% of the expiring square footage for fiscal 2018, and one property, representing 14% of the expiring square footage for fiscal 2018, was re-tenanted for 3 years. The remaining lease that did not renew, expired on December 31, 2017 and represents 5% of the expiring square footage for fiscal 2018. This tenant leased 80,856 square feet at our 255,658 square foot industrial park located in Monaca (Pittsburgh), PA. This partially vacant property currently represents our only property with vacancy.
Two leases were set to expire during fiscal 2018 with Kellogg Sales Company (Kellogg) for our 65,067 square foot facility located in Kansas City, MO through July 31, 2018 and our 50,400 square foot facility located in Orangeburg, NY through February 28, 2018. Kellogg informed us that they would not be renewing these leases. On December 18, 2017,Effective October 1, 2020, we sold our property located in Kansas City, MO for $4,900,000, with net sale proceeds of approximately $4,602,000 and on December 22, 2017, we sold our property located in Orangeburg, NY for $6,170,000, with net sale proceeds of approximately $5,898,000. The sale of these two properties resulted in a realized gain of approximately $5,388,000, representing a 105% gain over the depreciated U.S. GAAP basis and a realized net gain of approximately $1,804,000, representing a 21% net gain over our historic undepreciated cost basis. In conjunction with the sale of these two properties, we simultaneously entered into a lease termination agreement with RGH Enterprises, Inc. (Cardinal Health) for each propertyour 75,000 square foot facility located in Halfmoon (Albany), NY whereby we received a termination fee from Kellogg totalingin the amount of $377,000, representing approximately $210,000 which represents a weighted average of 80%50% of the then remaining rent due under each respective lease.
On June 1, 2018, we sold a 68,370 square foot building located in Colorado Springs, CO for $5,800,000, with net sale proceeds of approximately $5,465,000,the lease, which was our approximate U.S. GAAP net book carrying value. Prior to the sale of this property, it was leased to FedEx Ground Package System, Inc. through September 2018. The tenant informed us that they would not be renewing this lease because they have moved their operations from our former 68,370 square foot facility to our newly constructed 225,362 square foot facility, which is also located in Colorado Springs, CO. On June 9, 2016, we purchased this newly constructed 225,362 square foot industrial building, which is leased to FedEx Ground Package System, Inc. for 10 years through January 2026.
Another remaining lease that was set to expire during fiscal 2018 was leased to Caterpillar Logistics Services, Inc. (Caterpillar) at our 218,120 square foot facility located in Griffin, GA through December 31, 2017. In September 2017, weon November 30, 2021. We simultaneously entered into a three10.4 year lease agreement with Rinnai America Corporation through December 31, 2020 for this location. The new lease commenced on January 1, 2018, with initial annual rent of $807,044, representing $3.70 per square foot, with 3.0% annual increases thereafter, resulting in a straight-line annualized rent of $831,000, representing $3.81 per square foot over the life of the lease. This compares to the former U.S. GAAP straight-line and the former cash rent of $5.36 per square foot, resulting in a decrease in the average lease rate of 28.9% on a U.S. GAAP straight-line basis and a decrease of 31.0% on a cash basis.
Other Fiscal 2018 Leasing Activity
EffectiveUnited Parcel Service, Inc. (UPS) which became effective November 1, 2017, we entered into a 10.2 year2020. The lease agreement with FBM Gypsum Supply of Illinois, LLCUPS provides for our 36,270 square foot facility located in Urbandale (Des Moines), IA. The lease agreement provided for twofive months of free rent, after which, on JanuaryApril 1, 2018,2021, initial annual rent of $159,588,$510,000, representing $4.40$6.80 per square foot, commenced, with 2.0% annual increases thereafter, resulting in a straight-line annualized rent of approximately $172,000,$541,000, representing $4.74$7.21 per square foot throughover the expiration datelife of the lease, which is Decemberexpires March 31, 2027.2031. This new rent compares to the former averageU.S. GAAP straight-line rent of $3.56$574,000, representing $7.65 per square foot, and former cash rent of $8.19 per square foot, resulting in a decrease of $33,000, representing a 5.8% decrease on a U.S. GAAP straight-line basis and a decrease of 17.0% on a cash basis. The new 10.4 year lease agreement with UPS provides for an additional 9.3 years of lease term versus the former cashold lease with Cardinal Health. In addition, effective June 4, 2021, we completed a parking lot expansion at this location for a cost of $835,000 resulting in an initial increase in annual rent effective on the date of $3.88completion of $52,000 from $510,000, or $6.80 per square foot, to $562,000, or $7.50 per square foot. Furthermore, annual rent will continue to increase each year by 2.0% resulting in an increaseannualized rent from June 4, 2021 through the remaining term of the lease of $622,000, or $8.29 per square foot.
Effective December 15, 2020, we entered into a 10.3 year lease with Hartford HealthCare Corporation for our previously vacant 55,000 square foot facility located in Newington (Hartford), CT. The new lease has free rent for the average lease rate of 33.1% onfirst four months, after which initial annual rent will be $288,000, representing $5.25 per square foot with 2.0% annual increases thereafter, resulting in a U.S. GAAP straight-line basisannualized rent of $307,000, representing $5.60 per square foot over the life of the lease. Hartford HealthCare Corporation is rated “investment-grade” as defined by S&P Global Ratings (www.standardandpoors.com) and an increase of 13.4% on a cash basis.by Moody’s (www.moodys.com).
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Fiscal 20192022 Renewals
In fiscal 2019,2022, existing leases with respect to approximately 7%5% of our gross leasable area, representing 12seven leases totaling 1,485,7701.2 million square feet, is setwere scheduled to expire. AsTwo of the date of this Annual Report, 5 of the 12these seven leases have renewed. The five leases that havewere renewed thus far, for a weighted average term of 6.8 years, at a rental rate increase of 6.5% on a GAAP basis and flat on a cash basis. These two lease renewals represent 802,595104,000 square feet, or 54%9% of the expiring square footage scheduled to expire in fiscal 2022.
We have incurred or we expect to incur leasing commission costs of $220,000 in connection with one of these lease renewals and have a weighted average lease term of 8.4 years.
Wewe have incurred or we expect to incur tenant improvement costs of approximately $1,786,000 and leasing commission costs of approximately $991,000$50,000 in connection with these fivethe other lease renewals.renewal. The table below summarizes the lease terms of the fivetwo leases whichthat were renewed. In addition, the table below includes both the tenant improvement costs and the leasing commission costs, which are presented on a per square foot (PSF) basis averaged annually over the renewal term.
terms.
Property | Tenant | Square Feet | Former U.S. GAAP Straight- Line Rent PSF | Former Cash Rent PSF | Former Lease Expiration | Renewal U.S GAAP Straight- Line Rent PSF | Renewal Initial Cash Rent PSF | Renewal Lease Expiration | Renewal Term (years) | Tenant Improvement Cost PSF over Renewal Term (1) | Leasing Commission Cost PSF over Renewal Term (1) | |||||||||||||||||||||||||||
Houston, TX | National Oilwell Varco | 91,925 | $ | 8.26 | $ | 8.44 | 9/30/22 | $ | 8.88 | $ | 8.44 | 9/30/29 | 7.0 | $ | -0- | $ | 0.34 | |||||||||||||||||||||
Burr Ridge, IL | Sherwin-Williams | 12,500 | 12.80 | 12.94 | 10/31/21 | 12.99 | 12.94 | 10/31/26 | 5.0 | 0.80 | -0- | |||||||||||||||||||||||||||
Total | 104,425 | |||||||||||||||||||||||||||||||||||||
Weighted Average | $ | 8.80 | $ | 8.98 | $ | 9.37 | $ | 8.98 | 6.8 | $ | 0.07 | $ | 0.31 |
Property | Tenant | Square Feet | Former U.S. GAAP Straight- Line Rent PSF | Former Cash Rent PSF | Former Lease Expiration | Renewal U.S GAAP Straight- Line Rent PSF | Renewal Initial Cash Rent PSF | Renewal Lease Expiration | Renewal Term (years) | Tenant Improvement Cost PSF over Renewal Term (1) | Leasing Commission Cost PSF over Renewal Term (1) | |||||||||||||||||||||||||||
Somerset, NJ | Taco Bell | 21,365 | $ | 4.68 | $ | 4.68 | 10/14/18 | $ | 5.15 | $ | 5.15 | 10/14/23 | 5.0 | $ | -0- | $ | -0- | |||||||||||||||||||||
Carrollton (Dallas), TX | Carrier Enterprise | 184,317 | 8.20 | 8.55 | 01/11/19 | 6.24 | 6.00 | 01/31/24 | 5.0 | 0.20 | 0.39 | |||||||||||||||||||||||||||
Lebanon (Cincinnati), OH (2) | Siemens Real Estate | 51,130 | 8.82 | 9.67 | 04/30/19 | 8.94 | 8.50 | 04/30/24 | 5.0 | 0.40 | 0.40 | |||||||||||||||||||||||||||
Memphis, TN (2) | FedEx Express | 449,900 | 2.84 | 2.95 | 05/31/19 | 3.10 | 3.10 | 05/31/29 | 10.0 | 0.30 | 0.09 | |||||||||||||||||||||||||||
Jacksonville, FL | FedEx Express | 95,883 | 5.40 | 5.40 | 05/31/19 | 5.59 | 5.59 | 05/31/29 | 10.0 | 0.16 | 0.11 | |||||||||||||||||||||||||||
Total | 802,595 | |||||||||||||||||||||||||||||||||||||
Weighted Average | $ | 4.81 | $ | 5.00 | $ | 4.55 | $ | 4.46 | 8.4 | $ | 0.26 | $ | 0.15 |
(1) | Amount calculated based on the total cost divided by the square feet, divided by the renewal term. | |
These fivetwo lease renewals result in a weighted average term of 8.4 years andhave a U.S. GAAP straight-line weighted average lease rate of $4.55$9.37 per square foot. The renewed weighted average initial cash rent per square foot is $4.46.$8.98. This compares to the former weighted average rent of $4.81$8.80 per square foot on a U.S. GAAP straight-line basis and the former weighted average cash rent of $5.00$8.98 per square foot, resulting in a decrease in the weighted average lease ratean increase of 5.4%6.5% on a U.S. GAAP straight-line basis and a decrease in the weighted average lease rate of 10.8%flat on a cash basis.
As discussed above, in the Fiscal 2018 Renewal section, our 91,776Our 105,000 square foot facility located in Hanahan (Charleston)Cheektowaga (Buffalo), SC, was leased to FedEx Ground Package System, Inc. and renewed for only four months, until November 30, 2018 because the tenant moved their operations from our 91,776 square foot facility to our newly constructed, much larger, 265,318 square foot facility, which is also located in Charleston, SC. The new 265,318 square foot facilityNY is leased to FedEx Ground Package System,Sonwil Distribution Center, Inc. for 15 years through June 2033. In addition, Carrier Enterprise, LLC (United Technologies)January 31, 2022. This tenant informed us that they will not be renewing their lease. We recently entered into a new seven-year lease agreement for this facility with UPS which becomes effective February 1, 2022 through January 31, 2029. The lease with UPS provides for initial annual rent of $683,000, representing $6.50 per square foot with 2.0% annual increases thereafter, resulting in a U.S. GAAP straight-line annualized rent of $725,000, representing $6.90 per square foot over the life of the lease. This compares to the former U.S. GAAP straight-line rent and former cash rent of $6.00 per square foot, resulting in an increase in the average lease rate of 15.0% on a U.S. GAAP straight-line basis and an increase of 8.3% on a cash basis. This lease to UPS, along with the two lease renewals in the table above, results in a weighted average term of 6.9 years, at a rental rate increase of 10.0% on a GAAP basis and an increase of 3.3% on a cash basis. These three leases represent 209,000 square feet, or 18% of the expiring square footage for fiscal 2022.
Also not included in the table above is our 60,000185,000 square foot facility located in Richmond, VA which expires onGranite City (St. Louis, MO), IL that is leased to Anheuser-Busch through November 30, 2018. Both our 91,776 square foot facility located2021. Anheuser-Busch renewed for only four months, until March 31, 2022, after which it is expected that they will be moving out. The four month extension provides for rent at an annualized rate of 150% of its current rent resulting in Hanahan (Charleston), SC and our 60,000 square foot facility located in Richmond, VA are currently being marketed.
On September 30, 2018, we had a weighted average lease maturity of 8.1 years with 7.5% of the weighted average grossan annualized rent scheduledof $1.3 million, representing $7.04 per square foot. This compares to expire each year.the former U.S. GAAP straight-line rent of $4.36 and former cash rent of $4.70 per square foot.
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The following table presents certain information as of September 30, 2018,2021, with respect to our leases expiring over the future fiscal years endedending September 30th:
Expiration of Fiscal Year Ending September 30th | Property Count | Total Area Expiring (square feet) | Annualized Rent (in thousands) | Percent of Gross Annualized Rent | ||||||||||||
Vacant (1) | 1 | 83,886 | $ | -0- | 0 | % | ||||||||||
Shopping Center (2) | 1 | 61,190 | 616 | 0 | % | |||||||||||
2022 | 5 | 1,065,169 | 5,723 | 4 | % | |||||||||||
2023 | 16 | 2,117,731 | 12,076 | 7 | % | |||||||||||
2024 | 13 | 1,887,039 | 11,797 | 7 | % | |||||||||||
2025 | 11 | 2,607,541 | 12,980 | 8 | % | |||||||||||
2026 | 14 | 1,738,731 | 10,850 | 7 | % | |||||||||||
2027 | 13 | 2,390,188 | 13,297 | 8 | % | |||||||||||
2028 | 10 | 2,172,458 | 11,857 | 7 | % | |||||||||||
2029 | 9 | 1,831,303 | 10,610 | 7 | % | |||||||||||
2030 | 5 | 1,102,002 | 8,490 | 5 | % | |||||||||||
2031 | 6 | 1,218,941 | 9,738 | 6 | % | |||||||||||
2032 | 8 | 2,131,983 | 18,862 | 12 | % | |||||||||||
2033 | 3 | 1,038,508 | 8,844 | 5 | % | |||||||||||
2034 | 3 | 1,561,256 | 9,365 | 6 | % | |||||||||||
2035 | 3 | 856,283 | 8,343 | 5 | % | |||||||||||
2036 | 2 | 403,025 | 5,212 | 3 | % | |||||||||||
2041 | 1 | 657,518 | 5,458 | 3 | % | |||||||||||
Total (3) | 122 | 24,924,752 | $ | 164,118 | 100 | % |
Expiration of Fiscal Year Ended September 30th | Property Count | Total Area Expiring (square feet) | Annualized Rent | Percent of Gross Annualized Rent | ||||||||||
Vacant (1) | 1 | 80,856 | $ | -0- | 0 | % | ||||||||
Shopping Center (2) | 1 | 64,220 | 807,000 | 1 | % | |||||||||
2019 | 6 | 681,395 | 3,914,000 | 3 | % | |||||||||
2020 | 4 | 383,449 | 2,129,000 | 2 | % | |||||||||
2021 | 10 | 1,206,723 | 5,467,000 | 4 | % | |||||||||
2022 | 7 | 1,138,320 | 6,419,000 | 5 | % | |||||||||
2023 | 13 | 1,668,804 | 9,481,000 | 7 | % | |||||||||
2024 | 12 | 1,584,634 | 10,094,000 | 8 | % | |||||||||
2025 | 9 | 2,404,478 | 12,271,000 | 10 | % | |||||||||
2026 | 7 | 982,226 | 7,922,000 | 6 | % | |||||||||
2027 | 11 | 2,304,616 | 12,629,000 | 10 | % | |||||||||
2028 | 11 | 2,571,915 | 13,826,000 | 11 | % | |||||||||
2029 | 5 | 1,171,338 | 5,454,000 | 4 | % | |||||||||
2030 | 4 | 1,044,832 | 7,403,000 | 6 | % | |||||||||
2031 | 3 | 963,269 | 7,122,000 | 6 | % | |||||||||
2032 | 6 | 1,724,838 | 13,134,000 | 10 | % | |||||||||
2033 | 2 | 639,068 | 6,514,000 | 5 | % | |||||||||
2034 | 1 | 558,600 | 2,206,000 | 2 | % | |||||||||
Total (3) | 111 | 21,173,581 | $ | 126,792,000 | 100 | % |
(1) | “Vacant” represents | |
(2) | ||
(3) | The property located in Monaca |
Litigation Relating to our Terminated Merger Agreement with Equity Commonwealth
None.We and the members of our Board of Directors are defendants in a class action lawsuit that was commenced in the Circuit Court for Baltimore City, Maryland in August 2021, prior to termination of our merger agreement with EQC, and which currently remains pending. The lawsuit alleges that our directors violated their legal duties in connection with the proposed EQC merger and seeks injunctive relief and damages. We believe that the claims asserted in this lawsuit are without merit and that in any event the claims are now moot in light of the termination of the merger agreement. We intend to seek to have this lawsuit dismissed. However, litigation is inherently uncertain and there can be no assurance we will be successful in obtaining a dismissal. Four other lawsuits that had been brought with respect to the proposed merger with EQC after the transaction was announced have since been voluntarily dismissed by the plaintiffs in light of the termination of the EQC merger agreement.
Former Litigation with Blackwells Capital and Allison Nagelberg
On November 4, 2021, we entered into a Release and Settlement Agreement with our former general counsel, Allison Nagelberg, and Blackwells Capital LLC (“Blackwells”) resolving legal proceedings that we had commenced against Ms. Nagelberg and Blackwells in the Superior Court of New Jersey relating to, among other things, Ms. Nagelberg having been named as a nominee of Blackwells for election to our Board of Directors at our 2021 annual meeting, and also resolving Ms. Nagelberg’s counterclaim against us seeking indemnification and advancement of expenses. In connection with the settlement, the parties exchanged mutual releases, whereby, among other things, Blackwells agreed to release claims, including those it had previously demanded that we assert against the members of our Board for alleged breach of their legal duties relating to the Board’s rejection of an unsolicited acquisition offer that we received from Blackwells in December 2020 and subsequent actions taken by the Board in connection with its review of strategic alternatives earlier this year.
Simultaneous with the Release and Settlement Agreement, we and Blackwells entered into a Cooperation Agreement that, among other things, resolved a potential proxy contest to elect directors at the 2021 Annual Meeting. Under the Cooperation Agreement, Blackwells also agreed, among other things, to withdraw its slate of proposed nominees and various shareholder proposals for consideration at the 2021 Annual Meeting and committed to vote all its shares of our common stock at the 2021 Annual Meeting in favor of all of the Board’s director nominees and in support of all Board-recommended proposals, including voting in favor of the Merger Agreement with ILPT. Blackwells also agreed to comply with certain additional standstill, voting and affirmative solicitation commitments and terms.
The estimated costs associated with the Release and Settlement Agreement and the Cooperation Agreement and the related litigation and potential litigation have been reflected in the accompanying Consolidated Financial Statements.
ITEM 4 – MINE SAFETY DISCLOSURES
None.
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ITEM 5 - MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Since June 1, 2010, the common stock of Monmouth Real Estate Investment Corporation, $0.01 par value per share (common stock), has been traded on the New York Stock Exchange (NYSE), under the symbol “MNR”.“MNR.” Previously, the common stock was traded on the NASDAQ Global Select Market.
Shareholder Information
As of November 15, 2018, 1,2781, 2021, 1,191 shareholders of record held shares of our common stock.
Dividends
On January 14, 2021, our Board of Directors approved a 5.9% increase in our quarterly common stock dividend, raising it to $0.18 per share from $0.17 per share representing an annualized dividend rate of $0.72 per share. This increase was the third dividend increase in the past five years, representing a total increase of 20%. We have maintained or increased our common stock cash dividend for 30 consecutive years. We are one of the few REITs that maintained our dividend throughout the Global Financial Crisis. We currently expect that comparable cash dividends will continue to be paid in the future.
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities
On January 16, 2018, theSeptember 14, 2021, our Board of Directors reaffirmed our ShareCommon Stock Repurchase Program (Repurchase Program)(the “Program”) that authorizes us to purchase up to $10,000,000 in the aggregate$50.0 million of shares of our common stock. The Repurchase Program was originally created on March 3, 2009timing, manner, price and is intendedamount of any repurchase will be determined by us at our discretion and will be subject to be implemented through purchases made from time to time using a variety of methods, which may include openeconomic and market purchases, privately negotiated transactions or block trades, or by any combination of such methods, in accordance withconditions, stock price, applicable insider tradinglegal requirements and other securities laws and regulations.factors. The size, scope and timing of any purchases will be based on business, market and other conditions and factors, including price, regulatory and contractual requirements or consents, and capital availability. The Repurchase Program does not require us to acquire any particular amount of common stock,have a termination date and the program may be suspended modified or discontinued at any time at our discretion without prior notice. During the fiscal year ended September 30, 2018,2020, we did not reacquire any of our ownrepurchased 400,000 shares of common stock. The maximum dollar value that may be purchased under the Repurchase Program as of September 30, 2018 is $10,000,000.
Equity Compensation Plan Information
At our Annual Meeting held on May 18, 2017, our common shareholders approved our Amended and Restated 2007 Incentive Award Plan (the Plan) which extended the term of our 2007 Incentive Award Plan for an additional 10 years, until March 13, 2027, added 1,600,000 shares of common stock to the share reserve, expanded the types of awards available for grant under the Plan and made other improvements to the 2007 Plan. As of September 30, 2018, there were 1,671,872 shares available for grant as stock options, restricted stock and other equity-based awards under the Plan. During fiscal 2018, options to purchase 65,000 shares were granted with an exercise price of $17.80 and options to purchase 40,000 shares were exercised at an exercise price of $14.24 per share for total proceeds of $569,600. In addition, during fiscal 2018, 12,500 shares of restricted common stock were granted with a fair value on the grant date of $16.47 per share. In addition, during fiscal 2018, 3,670 unrestricted shares of common stock were granted with a weighted average fair value on the grant date of $16.10 per share. See Note 9 in the Notes to the Consolidated Financial Statements included in this Form 10-K for a description of the plan. See Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters for a table of beneficial ownership of our common stock.stock for $4.3 million at an average price of $10.69 per share. These were the only repurchases made under the Program thus far.
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The following table summarizes information, as of September 30, 2018, relating to our equity compensation plan (including individual compensation arrangements) pursuant to which our equity securities are authorized for issuance:
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plan (excluding Securities reflected in column (a)) | ||||||||||
Plan Category | (a) | (b) | (c) | |||||||||
Equity Compensation Plan Approved by Security Holders | 695,000 | $ | 12.17 | 1,671,872 | ||||||||
Equity Compensation Plans Not Approved by Security Holders | - | - | - | |||||||||
Total | 695,000 | $ | 12.17 | 1,671,872 |
Comparative Stock Performance
The following line graph compares the total return of our common stock for the last five fiscal years to the FTSE NAREITNareit Composite Index (US), published by the National Association of Real Estate Investment Trusts (NAREIT)(Nareit), and the S&P 500 Index for the same period. The graph assumes a $100 investment in our common stock and in each of the indexes listed below on September 30, 20132016 and the reinvestment of all dividends. The total return reflects stock price appreciation and dividend reinvestment for all three comparative indices. The information has been obtained from sources believed to be reliable, but neither its accuracy nor its completeness is guaranteed. Our stock performance shown in the graph below is not indicative of future stock performance.
ITEM 6 – [RESERVED]
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ITEM 6 – SELECTED FINANCIAL DATA
The following table sets forth selected financial and other information on us for the periods and as of the dates indicated. This table should be read in conjunction with management’s discussion and analysis of financial condition and results of operations and all of the financial statements and notes thereto included elsewhere herein.
September 30, | ||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
OPERATING DATA: | ||||||||||||||||||||
Rental and Reimbursement Revenue | $ | 139,161,849 | $ | 116,385,305 | $ | 97,755,433 | $ | 77,775,497 | $ | 64,672,341 | ||||||||||
Real Estate Taxes and Operating Expenses | (24,390,117 | ) | (20,154,556 | ) | (17,568,623 | ) | (12,490,019 | ) | (11,317,479 | ) | ||||||||||
Net Operating Income - NOI | 114,771,732 | 96,230,749 | 80,186,810 | 65,285,478 | 53,354,862 | |||||||||||||||
Lease Termination Income | 210,261 | -0- | -0- | 238,625 | 1,182,890 | |||||||||||||||
Gain on Sale of Securities Transactions | 111,387 | 2,311,714 | 4,398,599 | 805,513 | 2,166,766 | |||||||||||||||
Dividend and Interest Income | 13,120,465 | 6,930,564 | 5,616,392 | 3,723,867 | 3,882,597 | |||||||||||||||
General and Administrative Expenses | (8,776,579 | ) | (7,809,546 | ) | (7,936,124 | ) | (6,305,928 | ) | (5,709,937 | ) | ||||||||||
Acquisition Costs | -0- | (178,526 | ) | (730,441 | ) | (1,546,088 | ) | (481,880 | ) | |||||||||||
Interest Expense (1) | (32,349,705 | ) | (25,754,121 | ) | (22,953,049 | ) | (19,844,166 | ) | (16,830,423 | ) | ||||||||||
Depreciation & Amortization Expense | (38,567,027 | ) | (31,459,749 | ) | (26,087,680 | ) | (21,772,728 | ) | (17,719,581 | ) | ||||||||||
Income from Continuing Operations | 48,520,534 | 40,271,085 | 32,494,507 | 20,584,573 | 19,845,294 | |||||||||||||||
Gain on Sale of Real Estate Investments | 7,485,266 | -0- | -0- | 5,021,242 | -0- | |||||||||||||||
Net Income | 56,005,800 | 40,271,085 | 32,494,507 | 25,605,815 | 19,845,294 | |||||||||||||||
Preferred Dividends | (17,190,456 | ) | (14,861,686 | ) | (9,020,470 | ) | (8,607,032 | ) | (8,607,032 | ) | ||||||||||
Redemption of Preferred Stock | -0- | (2,467,165 | ) | (2,942,149 | ) | -0- | -0- | |||||||||||||
Net Income Attributable to Common Shareholders | $ | 38,815,344 | $ | 22,942,234 | $ | 20,531,888 | $ | 16,998,783 | $ | 11,238,262 | ||||||||||
Net Income Per Share | ||||||||||||||||||||
Basic | $ | 0.71 | $ | 0.56 | $ | 0.50 | $ | 0.43 | $ | 0.40 | ||||||||||
Diluted | 0.71 | 0.56 | 0.50 | 0.43 | 0.40 | |||||||||||||||
Net Income Attributable to Common Shareholders Per Share | ||||||||||||||||||||
Basic | 0.49 | 0.32 | 0.31 | 0.29 | 0.23 | |||||||||||||||
Diluted | 0.49 | 0.32 | 0.31 | 0.29 | 0.23 |
BALANCE SHEET DATA: | ||||||||||||||||||||
Total Assets | $ | 1,718,377,886 | $ | 1,443,037,755 | $ | 1,223,485,885 | $ | 910,905,721 | $ | 739,843,222 | ||||||||||
Real Estate Investments, net | 1,512,512,785 | 1,260,830,451 | 1,013,103,314 | 806,465,906 | 627,068,988 | |||||||||||||||
Fixed Rate Mortgage Notes Payable, net | 711,545,649 | 591,364,371 | 477,476,010 | 368,904,953 | 283,882,528 | |||||||||||||||
Loans Payable | 186,608,676 | 120,091,417 | 80,790,684 | 85,041,386 | 25,200,000 | |||||||||||||||
Preferred Stock Called for Redemption | -0- | -0- | 53,493,750 | -0- | -0- | |||||||||||||||
7.625% Series A Cumulative Redeemable Preferred Stock | -0- | -0- | -0- | 53,493,750 | 53,493,750 | |||||||||||||||
7.875% Series B Cumulative Redeemable Preferred Stock | -0- | -0- | 57,500,000 | 57,500,000 | 57,500,000 | |||||||||||||||
6.125% Series C Cumulative Redeemable Preferred Stock | 287,200,025 | 245,986,125 | 135,000,000 | -0- | -0- | |||||||||||||||
Total Shareholders’ Equity | 797,905,767 | 712,865,696 | 597,858,098 | 446,010,640 | 420,631,082 | |||||||||||||||
CASH FLOW DATA: | ||||||||||||||||||||
Net Cash Provided (Used) By: | ||||||||||||||||||||
Operating Activities | $ | 85,529,162 | $ | 73,867,866 | $ | 54,699,500 | $ | 38,062,285 | $ | 34,856,285 | ||||||||||
Investing Activities | (332,513,200 | ) | (339,071,013 | ) | (227,845,089 | ) | (194,469,735 | ) | (131,809,697 | ) | ||||||||||
Financing Activities | 246,082,577 | 179,679,685 | 256,821,188 | 148,006,698 | 105,023,561 |
September 30, | ||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
OTHER INFORMATION: | ||||||||||||||||||||
Average Number of Common Shares Outstanding | ||||||||||||||||||||
Basic | 78,619,440 | 72,114,078 | 65,468,564 | 59,085,888 | 49,829,924 | |||||||||||||||
Diluted | 78,802,208 | 72,249,691 | 65,558,284 | 59,201,296 | 49,925,036 | |||||||||||||||
Funds From Operations* | $ | 69,841,849 | $ | 54,442,611 | $ | 46,598,043 | $ | 33,730,447 | $ | 29,000,443 | ||||||||||
Core Funds From Operations* | $ | 69,841,849 | $ | 57,088,302 | $ | 50,270,633 | $ | 35,276,535 | $ | 29,482,323 | ||||||||||
Adjusted Funds From Operations* | $ | 68,375,031 | $ | 54,880,438 | $ | 45,865,343 | $ | 33,976,958 | $ | 25,843,710 | ||||||||||
Cash Dividends per Common Share | $ | 0.68 | $ | 0.64 | $ | 0.64 | $ | 0.60 | $ | 0.60 |
* We assess and measure our overall operating results based upon an industry performance measure referred to as Funds From Operations (FFO), which we believe is a useful indicator of our operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. FFO, as defined by the National Association of Real Estate Investment Trusts (NAREIT), represents net income attributable to common shareholders, as defined by accounting principles generally accepted in the United States of America (U.S. GAAP), excluding extraordinary items, as defined under U.S. GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization. FFO includes gains and losses realized on sale of securities investments. NAREIT created FFO as a non-GAAP supplemental measure of REIT operating performance. We define Core Funds From Operations (Core FFO) as FFO, plus acquisition costs and costs associated with the Redemption of Preferred Stock. We define Adjusted Funds From Operations (AFFO) as Core FFO, excluding stock based compensation expense, depreciation of corporate office tenant improvements, amortization of deferred financing costs, lease termination income, net gain or loss on sale of securities transactions, effect of non-cash U.S. GAAP straight-line rent adjustments, non-recurring other expenses and subtracting recurring capital expenditures. We define recurring capital expenditures as all capital expenditures that are recurring in nature, excluding capital expenditures related to expansions at our current locations or capital expenditures that are incurred in conjunction with obtaining a new lease or a lease renewal. We believe that, as widely recognized measures of performance used by other REITs, FFO, Core FFO and AFFO may be considered by investors as supplemental measures to compare our operating performance to those of other REITs. FFO, Core FFO and AFFO exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have a different cost basis. However, other REITs may use different methodologies to calculate FFO, Core FFO and AFFO and, accordingly, our FFO, Core FFO and AFFO may not be comparable to all other REITs. The items excluded from FFO, Core FFO and AFFO are significant components in understanding our financial performance.
FFO, Core FFO and AFFO are non-GAAP performance measures and (i) do not represent Cash Flow from Operations as defined by U.S. GAAP; (ii) should not be considered as an alternative to Net Income or Net Income Attributable to Common Shareholders as a measure of operating performance or to Cash Flows from Operating, Investing and Financing Activities; and (iii) are not an alternative to Cash Flows from Operating, Investing and Financing Activities as a measure of liquidity. FFO, Core FFO and AFFO, as calculated by us, may not be comparable to similarly titled measures reported by other REITs.
The following is a reconciliation of our U.S. GAAP Net Income to our FFO, Core FFO and AFFO for the fiscal years ended September 30th:
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
Net Income Attributable to Common Shareholders | $ | 38,815,344 | $ | 22,942,234 | $ | 20,531,888 | $ | 16,998,783 | $ | 11,238,262 | ||||||||||
Plus: Depreciation Expense (Excluding Corporate Office) | 36,017,959 | 29,478,322 | 23,931,530 | 19,625,748 | 15,908,769 | |||||||||||||||
Plus: Amortization of Intangible Assets | 1,613,368 | 1,071,719 | 1,178,744 | 1,370,654 | 1,347,936 | |||||||||||||||
Plus: Amortization of Capitalized Lease Costs | 880,444 | 855,000 | 955,881 | 756,504 | 505,476 | |||||||||||||||
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments | (7,485,266 | ) | 95,336 | -0- | (5,021,242 | ) | -0- | |||||||||||||
FFO Attributable to Common Shareholders | 69,841,849 | 54,442,611 | 46,598,043 | 33,730,447 | 29,000,443 | |||||||||||||||
Plus: Acquisition Costs | -0- | 178,526 | 730,441 | 1,546,088 | 481,880 | |||||||||||||||
Plus: Redemption of Preferred Stock | -0- | 2,467,165 | 2,942,149 | -0- | -0- | |||||||||||||||
Core FFO Attributable to Common Shareholders | 69,841,849 | 57,088,302 | 50,270,633 | 35,276,535 | 29,482,323 | |||||||||||||||
Plus: Stock Compensation Expense | 433,895 | 624,706 | 926,465 | 448,895 | 347,002 | |||||||||||||||
Plus: Depreciation of Corporate Office Capitalized Costs | 157,964 | 156,676 | 123,492 | 79,572 | -0- | |||||||||||||||
Plus: Amortization of Financing Costs | 1,220,983 | 1,234,259 | 1,116,238 | 1,286,016 | 725,745 | |||||||||||||||
Plus: Non-recurring Other Expense (1) | -0- | -0- | 500,000 | -0- | -0- | |||||||||||||||
Less: Lease Termination Income | (210,261 | ) | -0- | -0- | (238,625 | ) | (1,182,890 | ) | ||||||||||||
Less: Gain on Sale of Securities Transactions | (111,387 | ) | (2,311,714 | ) | (4,398,599 | ) | (805,513 | ) | (2,166,766 | ) | ||||||||||
Less: Effect of non-cash U.S. GAAP Straight-line Rent Adjustment | (1,972,588 | ) | (1,027,927 | ) | (1,709,821 | ) | (1,446,264 | ) | (600,745 | ) | ||||||||||
Less: Recurring Capital Expenditures | (985,424 | ) | (883,864 | ) | (963,065 | ) | (623,658 | ) | (760,959 | ) | ||||||||||
AFFO Attributable to Common Shareholders | $ | 68,375,031 | $ | 54,880,438 | $ | 45,865,343 | $ | 33,976,958 | $ | 25,843,710 |
ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONOPERATIONS
Cautionary Statement Regarding Forward-Looking Statements
Statements contained in this Form 10-K that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). Forward-looking statements provide our current expectations or forecasts of future events. In particular, statements relating to our liquidity and capital resources, portfolio performance and results of operations contain forward-looking statements. Furthermore, all of the statements regarding future financial performance are forward-looking statements. We are including this cautionary statement to make applicable and take advantage of the safe harbor provisions of the Securities Act and Exchange Act for any such forward-looking statements. We caution investors that any forward-looking statements presented in this Form 10-K are based on management’s belief and assumptions made by, and information currently available to, management. Forward-looking statements can be identified by their use of forward-looking words, such as “may,” “will,” “anticipate,” “expect,” “believe,” “intend,” “plan,” “should,” “seek” or comparable terms, or the negative use of those words, but the absence of these words does not necessarily mean that a statement is not forward-looking. Forward-looking statements include statements about our expectations, beliefs, intentions, plans, objectives, goals, strategies, future events, performance and underlying assumptions and other statements that are not historical facts.
The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these factors are described below and under the headings “Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.Operations.” These and other risks, uncertainties and factors could cause our actual results to differ materially from those included in any forward-looking statements we make. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and we do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Important factors that could cause actual results to differ materially from our expectations include, among others:
● | the ability of our tenants to make payments under their respective leases; | |
● | our reliance on certain major tenants; | |
● | our ability to re-lease properties that are currently vacant or that become vacant; | |
● | our ability to obtain suitable tenants for our properties; | |
● | changes in real estate market conditions, economic conditions in the industrial sector, the markets in which our properties are located and general economic conditions; | |
● | the inherent risks associated with owning real estate, including local real estate market conditions, governing laws and regulations and illiquidity of real estate investments; | |
● | our ability to acquire, finance and sell properties on attractive terms; | |
● | our ability to repay debt financing obligations; | |
● | our ability to refinance amounts outstanding under our debt obligations at maturity on terms favorable to us, or at all; | |
● | the loss of any member of our management team; | |
● | our ability to comply with debt covenants; | |
● | our ability to integrate acquired properties and operations into existing operations; |
continued availability of proceeds from issuances of our debt or equity securities; |
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● | ||
the availability of other debt and equity financing alternatives; | ||
● | ||
changes in interest rates, including the replacement of the LIBOR reference rate, under our current credit facility and under any additional variable rate debt arrangements that we may enter into in the future; | ||
● | our ability to successfully implement our selective acquisition strategy; | |
● | our ability to maintain internal controls and procedures to ensure all transactions are accounted for properly, all relevant disclosures and filings are timely made in accordance with all rules and regulations, and any potential fraud or embezzlement is thwarted or detected; | |
● | changes in federal or state tax rules or regulations that could have adverse tax consequences; | |
● | declines in the market prices of our investment securities; | |
● | the effect of COVID-19 on our business and general economic conditions; | |
● | our ability to qualify as a REIT for federal income tax | |
● | inability to complete the proposed merger with ILPT because, among other reasons, one or more conditions to the closing of the proposed transaction may not be satisfied or waived; | |
● | uncertainty as to the timing of completion of the proposed merger; | |
● | potential adverse effects or changes to relationships with our tenants, employees, service providers or other parties conducting business with us resulting from the announcement or completion of the proposed merger; | |
● | the outcome of any legal proceedings that may be instituted against the parties and others related to the merger agreement; | |
● | possible disruptions from the proposed merger that could harm our business, including current plans and operations; | |
● | unexpected costs, charges or expenses resulting from the proposed merger; and | |
● | the possibility that the benefits anticipated from the proposed merger will not be realized or will not be realized within the expected time period. |
You should not place undue reliance on these forward-looking statements, as events described or implied in such statements may not occur. Although we have entered into the merger agreement with ILPT, there can be no assurance that the merger and other transactions contemplated by the merger agreement will be completed.
We undertake no obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise.
Merger Agreement with ILPT
As previously announced, on November 5, 2021, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Industrial Logistics Properties Trust, a Maryland real estate investment trust (“ILPT”), and Maple Delaware Merger Sub LLC, a Delaware limited liability company and a wholly owned subsidiary of ILPT (“Merger Sub”). Pursuant to the Merger Agreement, subject to the terms and conditions set forth in the Merger Agreement, we would be acquired by ILPT in an all-cash transaction for $21 per common share, payable in cash (representing an aggregate equity value of approximately $2.1 billion). The Merger Agreement provides, among other things, that we will be merged with and into Merger Sub (the “Merger”), with Merger Sub continuing as the surviving entity and as a wholly owned subsidiary of ILPT. Following the Merger, our common stock would no longer be traded on the New York Stock Exchange.
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The Merger Agreement provides that each share of our common stock, par value $0.01 per share (“Common Stock”) outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than shares of Common Stock owned by ILPT, Merger Sub or any wholly owned subsidiary of us or ILPT) will, at the Effective Time, automatically be cancelled and converted into the right to receive $21.00 in cash (the “Common Stock Merger Consideration”), without interest and subject to applicable withholding taxes. Pursuant to the Merger Agreement, as of the Effective Time, (i) each outstanding stock option will become fully vested and be converted into the right to receive an amount in cash equal to the product of (A) the excess, if any, of the Common Stock Merger Consideration over the applicable exercise price of such option, multiplied by (B) the number of shares subject to such option, subject to applicable withholding taxes, and (ii) each restricted stock award and restricted stock unit award that is outstanding immediately prior to the Effective Time will become fully vested and be converted into the right to receive the Common Stock Merger Consideration in respect of each underlying share of Common Stock, subject to applicable withholding taxes. Upon closing of the merger with ILPT, holders of our outstanding 6.125% Series C Cumulative Redeemable Preferred Stock (“Series C Preferred Stock”) will receive the amount of $25 per share plus any accrued and unpaid dividends. We plan to continue to pay our regular quarterly common stock dividend and our Series C Cumulative Redeemable Preferred Stock dividend for each full quarterly dividend period completed prior to the closing of the transaction.
ILPT’s acquisition of us is subject to obtaining the requisite approval of our common stockholders and the satisfaction of other customary closing conditions. The obligation of the parties to complete the Merger is subject to customary closing conditions, including the approval of the Merger Agreement by holders of at least two-thirds of our outstanding shares of Common Stock entitled to vote thereon (the “Company Stockholder Approval”) (ii) the absence of any law, order or injunction of a court or governmental entity of competent jurisdiction prohibiting the consummation of the Merger, (iii) the accuracy of the representations and warranties contained in the Merger Agreement (subject to certain qualifications), (iv) the performance in all material respects by the parties of their respective obligations under the Merger Agreement that are required to be performed at or prior to the Effective Time and (v) the absence of a Company Material Adverse Effect (as defined in the Merger Agreement) occurring after the date of the Merger Agreement.
We have made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants (i) to conduct its business in all material respects in the ordinary course during the period between the execution of the Merger Agreement and the closing of the Merger, and not to engage in specified types of transactions during this period, subject to certain exceptions and (ii) to convene a meeting of its stockholders for the purpose of obtaining the Company Stockholder Approval. The Merger Agreement contains customary no-shop restrictions that limit the ability of us and our representatives to solicit alternative acquisition proposals from third parties, subject to customary “fiduciary out” provisions.
Our Merger Agreement with ILPT represents the culmination of the publicly announced comprehensive strategic alternatives review processes conducted by our Board of Directors this year. Our Board re-initiated its strategic alternatives review process in September 2021 after a previous agreement for a merger that we entered into with another party, following a strategic alternatives review process earlier this year, did not receive the requisite approval of our stockholders and was terminated.
The following discussion should be read in conjunction with the financial statements and notes thereto included elsewhere herein.
Overview
Monmouth Real Estate Investment Corporation, founded in 1968, is one of the oldest public equity REITs in the world. We are a self-administered and self-managed REIT that seeks to invest in well-located, modern, singlesingle- tenant industrial buildings, leased primarily to investment-grade tenants or their subsidiaries on long-term net leases.net-leases. During the fiscal year 2021, we purchased four new built-to-suit, net-leased, industrial properties, located in the following MSA’s: Columbus, OH, Atlanta, GA, Burlington, VT and Knoxville, TN, totaling approximately 1.6 million square feet on 316.2 acres, for an aggregate purchase price of $258.4 million. These four properties are expected to generate annualized rental income over the life of their leases of $15.2 million. In connection with two of the four properties acquired during the 2021 fiscal year, we entered into one 17 year fully-amortizing mortgage loan and one 15 year fully-amortizing mortgage loan. In connection with the remaining two properties acquired during the 2021 fiscal year, we entered into commitments for two 15 year fully-amortizing mortgage loans. These four fully-amortizing loans have a weighted average term of 15.7 years. The principal amount of the four mortgage loans originally totaled $161.8 million with fixed interest rates ranging from 2.50% to 3.25%, resulting in a weighted average fixed interest rate of 2.89%. At September 30, 2018,2021, we held investments in 111122 properties totaling approximately 21,174,00024.9 million square feet. Total real estate investments were $1,719,578,419 at September 30, 2018.feet with a weighted average building age, based on the square footage of our buildings, of 10.2 years. These properties are located in 3032 states: Alabama, Arizona, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington and Wisconsin. All of these properties are 100% owned by us, directly or through wholly-owned subsidiaries, with the exception of an industrialone property in New Jersey, in which we own a 51% controlling equity interest, and a shopping center in New Jersey, in which we own a 67% controlling equity interest.majority interest in and is our only non-industrial asset, which is a shopping center in Somerset, NJ. All of our investment properties are leased on a net basis except for an industrial park in Monaca (Pittsburgh), PA and our only non-industrial asset.
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Our weighted-averageweighted average lease expiration was 8.17.0 years and 7.97.1 years as of September 30, 20182021 and 2017,2020, respectively, and our average annualized rent per occupied square foot as of September 30, 20182021 and 20172020 was $6.01$6.61 and $5.93,$6.36, respectively. At September 30, 20182021 and 2017,2020, our overall occupancy rate was 99.6%99.7% and 99.3%99.4%, respectively. Our weighted average lease expiration has been 7.0 years or greater for over seven consecutive years. Our overall occupancy rate has been 98.9% or above for over six consecutive years.
We have a concentration of properties leased to FedEx Corporation (FDX). As of September 30, 2018,2021, we had approximately 21,174,00024.9 million leasable square feet, of property, of which approximately 10,083,00011.6 million square feet, or 48%47%, consisting of 6065 separate stand-alone leases, were leased to FDX and its subsidiaries (7%(5% to FDX and 41%42% to FDX subsidiaries). These properties are located in 2427 different states. As of September 30, 2018,2021, the 6065 separate stand-alone leases that are leased to FDX and FDX subsidiaries had a weighted average lease maturity of 9.47.5 years. The percentageAs of rentalSeptember 30, 2021, in addition to FDX and reimbursement revenueits subsidiaries, the only tenants that leased 5% or more of our total square footage were subsidiaries of Amazon, which are parties to five separate stand-alone leases for properties located in four different states, containing 1.5 million total square feet, comprising 6% of our total leasable square feet. Our Rental and Reimbursement Revenue from FDX and its subsidiaries was 58% for the fiscal year ended September 30, 2018, consisting2021 totaled $104.3 million, or as a percentage of 7% leasedtotal rent and reimbursement revenues were, 57% (5% from FDX and 52% from FDX subsidiaries). In addition to FDX and 51% leasedits subsidiaries, the only tenants to FDX subsidiaries. No other tenant accounted forcomprise 5% or more of our total Rental and Reimbursement revenueRevenue were subsidiaries of Amazon, which represented 6% of our Rental and Reimbursement Revenue for the fiscal 2018.
In addition to real estate property holdings, we held $154,920,545 in marketable REIT securities atyear ended September 30, 2018, representing 8.0%2021. None of our undepreciated assets (which is our total assets excluding accumulated depreciation). These liquid real estate holdingsproperties are subject to a master lease or any cross-collateralization agreements.
FDX and Amazon are publicly-listed companies and financial information related to these entities are available at the SEC’s website, www.sec.gov. FDX and Amazon are rated “BBB” and “AA”, respectively by S&P Global Ratings (www.standardandpoors.com) and are rated “Baa2” and “A1”, respectively by Moody’s (www.moodys.com), which are both considered “Investment Grade” ratings. The references in this report to the SEC’s website, S&P Global Ratings’ website and Moody’s website are not included in calculatingintended to and do not include, or incorporate by reference into this report, the tenant concentration ratios above and therefore further increase our diversification. The securities portfolio provides us with additional diversification, liquidity, and income, and serves as a proxy for real estate when more favorable risk adjusted returns are not available.information of FDX, Amazon, S&P Global Ratings or Moody’s on such websites.
Our revenue primarily consists of rental and reimbursement revenue from the ownership of industrial rental property. Rental and Reimbursement Revenue increased $22,776,544,$14.9 million, or 20%9%, for the year ended September 30, 2018,2021, as compared to the year ended September 30, 2017.2020. The increase was due mainly to the revenue relating to the property acquisitions made during fiscal 2021 and 2020. Total expenses (excluding other income and expense) increased $12,131,346,$42.4 million, or 20%49%, for the year ended September 30, 20182021 as compared to the year ended September 30, 2017.2020. The increases wereincrease was due mainly to the revenueNon-recurring Strategic Alternatives & Proxy Costs of $35.9 million and expenses relatingdepreciation expense which increased $4.8 million for the year ended September 30, 2021 as compared to the property acquisitions made during fiscal 2018 and 2017.year ended September 30, 2020.
Our Net Income (Loss) Attributable to Common Shareholders increased $15,873,110,$93.4 million, or 69%192%, for the fiscal year ended September 30, 20182021 as compared to the fiscal year ended September 30, 20172020 and increased $2,410,346,decreased $59.6 million, or 12%541%, for the fiscal year ended September 30, 20172020 as compared to the fiscal year ended September 30, 2016.2019. The increases wereincrease in our Net Income (Loss) Attributable to Common Shareholders from the fiscal year ended September 30, 2020 to the fiscal year ended September 30, 2021 was primarily due to the purchaseUnrealized Holding Gain Arising During the Period of additional properties$50.2 million offset by Non-recurring Strategic Alternatives & Proxy Costs of $35.9 million. The decrease in our Net Income (Loss) Attributable to Common Shareholders from the fiscal 2018year ended September 30, 2019 to the fiscal year ended September 30, 2020 was primarily due to an increase in unrealized gains and 2017.losses resulting from our securities investments. During the fiscal year ended September 30, 2020 and 2019, we recognized $77.4 million and $24.7 million of unrealized losses, respectively.
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We evaluate our financial performance using Net Operating Income (NOI) from property operations, which we believe is a useful indicator of our operating performance. NOI is a non-GAAP financial measure that we define as Net Income (Loss) Attributable to Common Shareholders plus Redemption ofNet Income (Loss) Attributable to Non-Controlling Interest, Preferred Stock, Preferred Dividends,Dividend Expense, General and Administrative Expenses, AcquisitionNon-recurring Strategic Alternatives & Proxy Costs, Non-recurring Severance Expense, Depreciation, Amortization of Capitalized Lease Costs and Intangible Assets, Interest Expense, including Amortization of Financing Costs, Unrealized Holding (Gains) Losses Arising During the Periods, less Dividend and Interest Income,Realized Gain on Sale of Securities Transactions, Realized Gain on Sale of Real Estate InvestmentsInvestment, Dividend Income and Lease Termination Income. The components of NOI are recurring Rental and Reimbursement Revenue, less Real Estate Taxes and Operating Expenses, such as insurance, utilities, and repairs and maintenance. Other REITs may use different methodologies to calculate NOI and, accordingly, our NOI may not be comparable to allcertain other REITs.
The following is a reconciliation of our Net Income (Loss) Attributable to Common Shareholders to our NOI for the fiscal years ended September 30, 2018, 20172021, 2020 and 2016:2019 (in thousands):
2018 | 2017 | 2016 | ||||||||||
Net Income Attributable to Common Shareholders | $ | 38,815,344 | $ | 22,942,234 | $ | 20,531,888 | ||||||
Plus: Redemption of Preferred Stock | -0- | 2,467,165 | 2,942,149 | |||||||||
Plus: Preferred Dividends | 17,190,456 | 14,861,686 | 9,020,470 | |||||||||
Plus: General and Administrative Expenses | 8,776,579 | 7,809,546 | 7,936,124 | |||||||||
Plus: Acquisition Costs | -0- | 178,526 | 730,441 | |||||||||
Plus: Depreciation | 36,175,923 | 29,634,998 | 24,055,022 | |||||||||
Plus: Amortization of Capitalized Lease Costs and Intangible Assets | 2,391,104 | 1,824,751 | 2,032,658 | |||||||||
Plus: Interest Expense, including Amortization of Financing Costs | 32,349,705 | 25,754,121 | 22,953,049 | |||||||||
Less: Dividend and Interest Income | (13,120,465 | ) | (6,930,564 | ) | (5,616,392 | ) | ||||||
Less: Gain on Sale of Securities Transactions | (111,387 | ) | (2,311,714 | ) | (4,398,599 | ) | ||||||
Less: Gain on Sale of Real Estate Investments | (7,485,266 | ) | -0- | -0- | ||||||||
Less: Lease Termination Income | (210,261 | ) | -0- | -0- | ||||||||
Net Operating Income – NOI | $ | 114,771,732 | $ | 96,230,749 | $ | 80,186,810 |
2021 | 2020 | 2019 | ||||||||||
Net Income (Loss) Attributable to Common Shareholders | $ | 44,764 | $ | (48,617 | ) | $ | 11,026 | |||||
Plus: Net Income (Loss) Attributable to Non-Controlling Interest | 2,996 | (31 | ) | 152 | ||||||||
Plus: Preferred Dividend Expense | 33,419 | 26,474 | 18,774 | |||||||||
Plus: General and Administrative Expenses | 9,353 | 8,932 | 9,081 | |||||||||
Plus: Non-recurring Strategic Alternatives & Proxy Costs | 35,920 | -0- | -0- | |||||||||
Plus: Non-recurring Severance Expense | -0- | 786 | -0- | |||||||||
Plus: Depreciation | 51,478 | 46,670 | 43,020 | |||||||||
Plus: Amortization of Capitalized Lease Costs and Intangible Assets | 3,586 | 3,180 | 2,870 | |||||||||
Plus: Interest Expense, including Amortization of Financing Costs | 37,880 | 36,376 | 36,912 | |||||||||
Plus: Unrealized Holding (Gains) Losses Arising During the Periods | (50,239 | ) | 77,380 | 24,680 | ||||||||
Less: Realized Gain on Sale of Securities Transactions | (2,248 | ) | 0 | 0 | ||||||||
Less: Realized Gain on Sale of Real Estate Investment | (6,376 | ) | 0 | 0 | ||||||||
Less: Dividend Income | (6,182 | ) | (10,445 | ) | (15,168 | ) | ||||||
Less: Lease Termination Income | (377 | ) | 0 | 0 | ||||||||
Net Operating Income – NOI | $ | 153,974 | $ | 140,705 | $ | 131,347 |
The components of our NOI for the fiscal years ended September 30, 2018, 20172021, 2020 and 20162019 are as follows:follows (in thousands):
2018 | 2017 | 2016 | 2021 | 2020 | 2019 | |||||||||||||||||||
Rental Revenue | $ | 115,864,119 | $ | 97,659,778 | $ | 81,592,429 | $ | 155,044 | $ | 141,583 | $ | 132,524 | ||||||||||||
Reimbursement Revenue | 23,297,730 | 18,725,527 | 16,163,004 | 27,712 | 26,234 | 22,297 | ||||||||||||||||||
Total Rental and Reimbursement Revenue | 139,161,849 | 116,385,305 | 97,755,433 | 182,756 | 167,817 | 154,821 | ||||||||||||||||||
Real Estate Taxes | (18,596,239 | ) | (15,266,634 | ) | (13,294,724 | ) | (21,798 | ) | (20,193 | ) | (17,010 | ) | ||||||||||||
Operating Expense | (5,793,878 | ) | (4,887,922 | ) | (4,273,899 | ) | (6,984 | ) | (6,919 | ) | (6,464 | ) | ||||||||||||
NOI | $ | 114,771,732 | $ | 96,230,749 | $ | 80,186,810 | $ | 153,974 | $ | 140,705 | $ | 131,347 |
NOI increased $18,540,983,$13.3 million, or 19%9%, for the fiscal year ended September 30, 2018,2021 as compared to the fiscal year ended September 30, 20172020 and increased $16,043,939,$9.4 million, or 20%7%, for the fiscal year ended September 30, 20172020 as compared to the fiscal year ended September 30, 2016.2019. The increase from fiscal year 20172020 to 20182021 was due to the additional income related to sevenfour industrial properties purchased during fiscal 20182021 and the purchase of tenfive industrial properties during fiscal 2017.2020. The increase from fiscal year 20162019 to 20172020 was due to the additional income related to tenfive industrial properties purchased during fiscal 20172020 and the purchase of eightthree industrial properties during fiscal 2016.2019.
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We evaluate our financial performance using earnings before interest, taxes, depreciation and amortization for real estate (Adjusted EBITDA) from property operations, which we believe is a useful indicator of our operating performance. Adjusted EBITDA is a non-GAAP financial measure that we define as Net Income (Loss) Attributable to Common Shareholders plus, Preferred Dividend Expense, Interest Expense, including Amortization of Financing Costs, Depreciation, Amortization of Capitalized Lease Costs and Intangible Assets, Unrealized Holding (Gains) Losses Arising During the Periods, and Non-recurring Strategic Alternatives & Proxy Costs less Gain on Sale of Securities Transactions and Gain on Sale of Real Estate Investments and our portion of these items related to our consolidated investment that we have a non-controlling interest in. Other REITs may use different methodologies to calculate Adjusted EBITDA and, accordingly, our Adjusted EBITDA may not be comparable to certain other REITs.
The following is a reconciliation of our Net Income (Loss) Attributable to Common Shareholders to our Adjusted EBITDA for the fiscal years ended September 30, 2021, 2020 and 2019 (in thousands):
2021 | 2020 | 2019 | ||||||||||
Net Income (Loss) Attributable to Common Shareholders | $ | 44,764 | $ | (48,617 | ) | $ | 11,026 | |||||
Plus: Preferred Dividend Expense | 33,419 | 26,474 | 18,774 | |||||||||
Plus: Interest Expense, including Amortization of Financing Costs | 37,880 | 36,376 | 36,912 | |||||||||
Plus: Depreciation and Amortization | 55,064 | 49,850 | 45,890 | |||||||||
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue | 103 | 103 | 103 | |||||||||
Plus: Unrealized Holding (Gains) Losses Arising During the Periods | (50,239 | ) | 77,380 | 24,680 | ||||||||
Plus: Non-recurring Strategic Alternatives & Proxy Costs | 35,920 | 0 | 0 | |||||||||
Less: Realized Gain on Sale of Securities Transactions | (2,248 | ) | 0 | 0 | ||||||||
Less: Realized Gain on Sale of Real Estate Investments (A) | (3,252 | ) | 0 | 0 | ||||||||
Adjusted EBITDA | $ | 151,411 | $ | 141,566 | $ | 137,385 |
(A) | Represents our portion of the net realized gain from the sale of our property that we owned a 51% interest in. |
Adjusted EBITDA increased $9.8 million, or 7%, for the fiscal year ended September 30, 2021 as compared to the fiscal year ended September 30, 2020 and increased $4.2 million, or 3%, for the fiscal year ended September 30, 2020 as compared to the fiscal year ended September 30, 2019. The increase from fiscal year 2020 to 2021 was due to the additional income related to four industrial properties purchased during fiscal 2021 and the purchase of five industrial properties during fiscal 2020. The increase from fiscal year 2019 to 2020 was due to the additional income related to five industrial properties purchased during fiscal 2020 and the purchase of three industrial properties during fiscal 2019.
For the fiscal years ended September 30, 2018, 20172021, 2020 and 2016,2019, gross revenue, which includes Rental Revenue, Reimbursement Revenue and Dividend and Interest Income, totaled $152,282,314, $123,315,869$188.9 million, $178.3 million and $103,371,825,$170.0 million, respectively.
Subsequent to fiscal yearend, on October 19, 2018,27, 2021, we purchased a newly constructed 347,145291,000 square foot industrial building, situated on 62.046.0 acres, located in Trenton, NJ.the Birmingham, AL MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through June 2032.July 2036. The purchase price was $85,248,352.$30.2 million. We obtained a mortgage loan commitment for a 15 year, fully-amortizing mortgage loan of $55,000,000$19.3 million at a fixed interest rate of 4.13%.2.40%, which has not yet closed. Annual rental revenue over the remaining term of the lease averages approximately $5,328,000.$1.7 million.
The industrial property purchased thus far during fiscal 2019 increased our current total leasable square feet to approximately 21,521,000.
In addition to the $30.2 million property purchased subsequent to our fiscal yearend,in October 2021, as described above, we have entered into agreements to purchase twothree, new build-to-suit, industrial buildings that are currently being developed in Alabama, Georgia and North Carolina, consisting of approximately 398,000Texas, totaling 1.1 million square feet, withfeet. These future acquisitions have net-leased terms ranging from 10 to 15 years with a weighted average lease term of 13.412.6 years. The total purchase price for these three properties is approximately $68,747,000$126.8 million. All three properties are leased to companies, or subsidiaries of companies, that are considered Investment Grade by S&P Global Ratings (www.standardandpoors.com) and bothby Moody’s (www.moodys.com). Two of these three properties, consisting of an aggregate of 563,000 square feet, or 52% of the total leasable area, are leased to FedEx Ground Package System, Inc. Subject to satisfactory due diligence and other customary closing conditions and requirements, we anticipate closing all three of these transactions during fiscal 2022.
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We have several FedEx Ground parking expansion projects in progress with more under discussion. Currently there are nine parking expansion projects underway, which we expect to cost approximately $42.6 million. These parking expansion projects will enable us to capture additional rent while lengthening the first quarter of fiscal 2019 and fiscal 2020. In connection with oneterms of these leases. We are also in discussions to expand the parking at eight additional locations bringing the total recently completed and likely future parking lot expansion projects to 18 currently.
Due to the proliferation of ecommerce sales and last mile deliveries, it is important to take into account the large amounts of real estate utilized for trailer, van, and car parking at many of our properties wein determining how our in-place rental rates compare to market rental rates for properties being used in a similar manner. Rents per square foot on properties that may be nearby, but have entered into a commitmentonly limited acreage devoted to obtain a 15 year, fully-amortizing mortgage loan of $17,500,000 with a fixed interest rate of 4.40%. We may make additional acquisitions in fiscal 2019 and fiscal 2020, andparking, are poor comparisons as they cannot accommodate the funds for these acquisitions may come from funds generated from operations, mortgages, draws on our unsecured line of credit facility, cash on hand, sale of marketable securities, other bank borrowings, proceeds from the DRIP, proceeds from the Preferred Stock ATM Program, and proceeds from private placements and public offerings of additional common or preferred stock or other securities. To the extent that funds or appropriate properties are not available, fewer acquisitions will be made.same tenant needs.
During the three fiscal years ended September 30, 2018, 20172021, 2020 and 2016,2019, we completed a total of seventhree property expansions, consisting of threeone building expansionsexpansion and fourtwo parking lot expansions. Three of the four parking lot expansions included the purchase of additional land. The three building expansionsexpansion resulted in approximately 312,000155,000 additional square feet. Total costs for all seventhree property expansions were approximately $22,189,000$12.9 million and resulted in total increased annual rent of approximately $2,090,000. Six$1.2 million. One of these completed expansions resulted in new ten yearten-year lease extensions for the expanded properties and one completed expansion resulted in a new twelve yearfifteen-year lease extension. The weighted average lease extension for these seventhree property expansions is 10.912.7 years.
For fiscal years 2021, 2020 and 2019, Gross Revenues also include Dividend and Interest Income and Gain on Sale of Securities Transactions.Income. We hold a portfolio of marketable securities of other REITs with a fair value of $154,920,545$143.5 million as of September 30, 2018,2021, representing 8.0%5.6% of our undepreciated assets (which is our total assets excluding accumulated depreciation). We intend to limit our marketable securities investmentsthe size of this portfolio to no more than approximately 10%5% of our undepreciated assets. We invest in REIT securities and, from time to time, may use margin debt when an adequate yield spread can be obtained. As of September 30, 2018 and 2017, there was $26,608,676 and $10,091,417 outstanding on the margin loan, respectively. Subsequent to fiscal yearend, on October 9, 2018, we paid off the margin loan. TheOur REIT securities portfolio provides us with additional diversification, liquidity, and income, and is a source of potential liquidity when needed and also serves as a proxy for real estate when more favorable risk adjusted returns are not available. As of September 30, 2018, our portfolio consisted primarily of 95% REIT common stocks and 5% REIT preferred stocks, all of which are listed on a national securities exchange. Our weighted-average yield onavailable in the securities portfolio for fiscal 2018 was approximately 9.5%. Dividend and Interest Income for fiscal 2018 was $13,120,465 compared to $6,930,564 for fiscal 2017. During fiscal 2018, we realized $111,387 in gains on sale of securities transactions.private real estate markets. We have unrealized losses of $24,744,579 in ournormally hold REIT securities portfolio as of September 30, 2018. The dividends received from our securities investments continue to meet our expectations. We intendlong-term and have the ability and intent to hold these securities for investment on a long-term basis.to recovery.
We had $9,324,585$48.6 million in Cash and Cash Equivalents and $154,920,545$143.5 million in REIT securities as of September 30, 2018.2021. We believe that funds generated from operations, mortgages, draws on our unsecured line of credit facility, cash on hand, salesales of marketable securities, other bank borrowings, proceeds from the DRIP, proceeds from the Preferred Stock ATM Program,our dividend reinvestment plan (DRIP), and proceeds from private placements and public offerings of additional common or preferred stock or other securities, will provide sufficient funds to adequately meet our obligations over the next several years.
We have a As previously announced, in January 2021, when our Board of Directors first decided to explore strategic alternatives, the Board also determined to temporarily suspend our DRIP, in which participants can purchaseand our stock at a price that is approximately 95% of market value. Amounts received in connection with the DRIP (including dividend reinvestments of $12,928,356, $10,125,894 and $8,369,146 for fiscal years ended 2018, 2017 and 2016, respectively) were $90,028,789, $91,931,831 and $72,175,797 for fiscal years ended 2018, 2017 and 2016, respectively.
On June 29, 2017, we entered into a Preferred Stock At-The-Market Sales Agreement Program with B. Riley FBR, Inc., or B. Riley (formerly FBR Capital Markets & Co.), that provided for the offer and sale of shares of our 6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 par value per share, with a liquidation preference of $25.00 per share, or our 6.125% Series C preferred stock, having an aggregate sales price of up to $100,000,000. On August 2, 2018, we replaced thisat-the-market offering program with a new Preferred Stock At-The-Market Sales Agreement Program (Preferred Stock ATM Program) with B. Riley that provides for the offer and sale from time to timeCommon Stock at-the-market offering program (Common Stock ATM Program). Because our exploration of $125,000,000 ofstrategic alternative process is ongoing, our 6.125% Series C preferred stock. We began selling shares through these programs on July 3, 2017. Since inception through September 30, 2018, we sold 3,088,001 shares under these programs at a weighted average price of $25.06 per share, and generated net proceeds, after offering expenses, of approximately $75,828,000, of which 1,648,556 shares were sold during the fiscal year ended 2018 at a weighted average price of $24.84 per share, and generated net proceeds, after offering expenses, of approximately $40,094,000. As of September 30, 2018, there is approximately $119,096,000 remaining that may be sold under theDRIP currently remains suspended. Our Preferred Stock ATM Program.
As of September 30, 2018, 11,488,001 shares of our 6.125% Series C Preferred Stock were issued and outstanding.
Subsequent to fiscal yearend, in October 2018, we completed a public offering of 9,200,000 shares of our Common Stock (including the underwriters’ option to purchase 1,200,000 additional shares) at a price of $15.00 per share, before underwriting discounts. We received net proceeds from the offering, after deducting underwriting discounts and all other transaction costs, of approximately $132,339,000.ATM Programs expired by their terms during August 2021.
Industrial space demand is very closely correlated to Gross Domestic Product (GDP) growth. Despite nine years of unprecedented monetary stimulus, real annual GDP growth averaged less than 2.0% over this period. Economic growth has been strong this past year further increasing demand for industrial space. The most significant demand driver for modernUS industrial real estate market conditions are as strong as they have ever been with record high asking rents, a robust development pipeline, and an all-time high occupancy rate of 96%. Companies are leasing space at record levels to handle the large increase in ecommerce sales as well as the need for safety stock to counter supply chain disruptions. Construction costs are rising dramatically due to the long lead times for sourcing materials. The amount of new construction for US industrial real estate has been increasing for several years as more industrial space is needed to handle direct-to-consumer distribution. It is estimated that ecommerce sales require three times the amount of warehouse space relative to brick and mortar retail sales. These new buildings are often highly automated and have much larger truck courts and parking requirements. Because modern industrial buildings are built to handle both wholesale distribution as well as direct to consumer distribution, they are known as omni-channel facilities. The West coast ports are continuing to experience severe bottlenecks in processing imports and as a result much container traffic is being diverted towards the Gulf and East coast ports. Given our geographic footprint, this trend is a very favorable one for us.
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Our portfolio of modern, net-leased industrial properties, continues to be ecommerce. Every year since the turn of the century, the percentage of goods purchased on-line has increased at an average 16% annual growth rate. Today, excluding food, fuel,provide shareholders with reliable and autos, approximately 19% of total retail sales have migrated from traditional store sales to on-line sales and we expect this growth in market share to continue.predictable income streams. We expect these favorable trends for the industrial real estate sector to be a leading demand driver for the foreseeable future, as consumers continue to embrace the added efficiencies of on-line consumption. The strong financial position of our tenants, together with the long duration of our leases, provides for high quality, reliable income streams throughout the business cycle.
We intend to continue to increase our real estate investments in fiscal 20192022 and 20202023 through acquisitions and expansions of our properties. The growth of theour real estate portfolio depends on the availability of suitable properties which meet our investment criteria and appropriate financing. Competition in the market areas in which we operate is significant and affects acquisitions, occupancy levels, rental rates and operating expenses of certain properties.
See PART I, Item 1 – Business and Item 1A – Risk Factors for a more complete discussion of the economic and industry-wide factors relevant to us and the opportunities and challenges, and risks on which we are focused.
Significant Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operation are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of our consolidated financial statements. Actual results may differ from these estimates under different assumptions or conditions.
Significant accounting policies are defined as those that involve significant judgment and potentially could result in materially different results under different assumptions and conditions. We believe the following significant accounting policies are affected by our more significant judgments and estimates used in the preparation of our consolidated financial statements. For a detailed description of these and other accounting policies, see Note 1 in the Notes to our Consolidated Financial Statements included in this Form 10-K.
Real Estate Investments
We apply Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360-10, Property, Plant & Equipment (ASC 360-10) to measure impairment in real estate investments. Rental properties are individually evaluated for impairment when conditions exist which may indicate that it is probable that the sum of expected future cash flows (on an undiscounted basis without interest) from a rental property is less than its historical net cost basis. These expected future cash flows consider factors such as future operating income, trends and prospects as well as the effects of leasing demand, competition and other factors. Upon determination that an other than temporary impairment has occurred, rental properties are reduced to their fair value. For properties to be disposed of, an impairment loss is recognized when the fair value of the property, less the estimated cost to sell, is less than the carrying amount of the property measured at the time there is a commitment to sell the property and/or it is actively being marketed for sale. A property to be disposed of is reported at the lower of its carrying amount or its estimated fair value, less its cost to sell. Subsequent to the date that a property is held for disposition, depreciation expense is not recorded.
Prior to the adoption of ASU 2017-01 on April 1, 2017, upon acquisition of a property, we allocated the purchase price of the property based upon the fair value of the assets acquired, which generally consisted of land, building and intangible assets, including above and below market leases and in-place leases. We allocated the purchase price to the fair value of the tangible assets of an acquired property generally determined by the third-party appraisal of the property obtained in conjunction with the purchase. The purchase price was further allocated to acquired above and below market leases based on the present value of the difference between prevailing market rates and the in-place lease rates over the remaining term. In addition, any remaining amounts of the purchase price were applied to in-place lease values based on our evaluation of the specific characteristics of each tenant’s lease. In-place leases that may have a customer relationship intangible value, including (but not limited to) the nature and extent of the existing relationship with the tenant, the tenant’s credit quality and expectations of lease renewals were also considered. Acquired above and below market leases were amortized to rental revenue over the remaining non-cancelable terms of the respective leases. The value of in-place lease intangibles was amortized to amortization expense over the remaining lease term. If a tenant terminated its lease early, the unamortized portion of the tenant improvements, leasing commissions, deferred rent, and the in-place lease value was charged to expense when there was a signed termination agreement, all of the conditions of the termination agreement were met, the tenant is no longer occupying the property and the termination consideration, if any, is probable of collection.
As a result of the adoption of Accounting Standards Update (ASU) 2017-01, effective April 1, 2017, we no longer account for our property acquisitions as business combinations and instead account for our property acquisitions as acquisitions of assets. In an acquisition of assets, certain acquisition costs are capitalized to real estate investments as part of the purchase price as opposed to being expensed as Acquisition Costs under the previous accounting treatment for business combinations. Therefore, as of April 1, 2017, we are no longer required to expense our Acquisition Costs.price. In addition, acquisitions that do not meet the definition of a business combination are accounted for as asset acquisitions whereby the consideration incurred is allocated to the individual assets acquired on a relative fair value basis.
We conducted a comprehensive review of all real estate asset classes in accordance with ASC 360-10, which indicates that asset values should be analyzed whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable.
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The following are examples of such events or changes in circumstances that would indicate to us that there may be an impairment of a property:
● | A non-renewal of a lease and subsequent | |
● | A renewal of a lease at a significantly lower rent than a previous lease; | |
● | A significant decrease in the market value of a property; | |
● | A significant adverse change in the extent or manner in which a property is being used or in its physical condition; | |
● | A significant adverse change in legal factors or in the business climate that could affect the value of a property, including an adverse action or assessment by a regulator; | |
● | An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a property; | |
● | A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a property; or | |
● | A current expectation that, more likely than not, a property will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. |
The process entails the analysis of property for instances where the net book value exceeds the estimated fair value. In accordance with ASC 360-10, an impairment loss shall be recognized if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. We utilize the experience and knowledge of our internal valuation team to derive certain assumptions used to determine an operating property’s cash flow. Such assumptions include re-leasing and renewal probabilities upon future lease expirations, vacancy factors, rental growth rates, and capital expenditures.
As part of our review of our property portfolio, we evaluated the oneour industrial property that was partially vacantproperties with vacancy at September 30, 2018.2021, which consists of 81,000 square feet, representing 0.3% of our total rentable square feet. The discounted cash flows expected from the lease applicable to the occupied portion of the property and the discounted cash flows expected from a potential lease applicable to the vacant portion of this propertythese properties exceeded its historical net cost basis. We consider, on a quarterly basis, whether the marketed rent (advertised) or the market rent has decreased or if any additional indicators are present which would indicate a significant decrease in net cash flows. We may obtain an independent appraisal to assist in evaluating a potential impairment for a property if it has been vacant for several years. We have also considered the properties which had lease renewals at rental rates lower than the previous rental rates and noted that the sum of the new discounted cash flows expected for the renewed leases exceeded these properties’ historical net cost basis.
We reviewed our operating properties in light of the requirements of ASC 360-10 and determined that, as of September 30, 2018,2021, the undiscounted cash flows over the holding period for these properties were in excess of their carrying values and, therefore, no impairment charges were required.
Securities Available for Sale
Investments in non-real estate assets consist primarily of marketable securities, which we generallysecurities. We intend to limit the size of this portfolio to no more than approximately 10%5% of our undepreciated assets, (which is ourwhich we define as total assets excluding accumulated depreciation).depreciation. The value of the marketable securities was $143.5 million as of September 30, 2021, representing 5.6% of our undepreciated assets. We continue to believe that our REIT securities portfolio provides us with diversification, income, a source of potential liquidity when needed and also serves as a proxy for real estate when more favorable risk adjusted returns are not available in the private real estate markets. Our decision to reduce this threshold mainly stems from the implementation of accounting rule ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”, which took effect at the beginning of the 2019 fiscal year. This rule requires that quarterly changes in the market value of our marketable securities flow through our Consolidated Statements of Income. The implementation of this accounting rule has resulted in increased volatility in our reported earnings and some of our key performance metrics. We individually review and evaluate our marketable securities for impairment on a quarterly basis, or when events or circumstances occur. We consider, among other things, credit aspects of the issuer, amount of decline in fair value over cost and length of time in a continuous loss position. If a decline in fair value is determined to be other than temporary, a non-cash impairment charge is recognized in earnings and the cost basis of the individual security is written down to fair value as the new cost basis.
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We classify our securities among three categories: held-to-maturity, trading, and available-for-sale. Our securities at September 30, 20182021 and 20172020 are all classified as available-for-sale and are carried at fair value based on quoted market prices. Gains or losses on the sale of securities are calculated based on the average cost method and are accounted for on a trade date basis. Net unrealized holding gains and losses are excluded from earnings and reported as a separate component of Shareholders’ Equity until realized. The change in net unrealized holding gains (losses) is reflected as comprehensive income (loss).
In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes became effective for our fiscal year beginning October 1, 2018. The most significant change for us, once ASU 2016-01 was adopted, was the accounting treatment for our investments in marketable securities that are classified as available for sale. The accounting treatment used for our Consolidated Financial Statements through Fiscal 2018, was that our investments in marketable securities, classified as available for sale, were carried at fair value, with net unrealized holding gains and losses being excluded from earnings and reported as a separate component of Shareholders’ Equity until realized and the change in net unrealized holding gains and losses being reflected as comprehensive income (loss). Under ASU 2016-01, effective October 1, 2018, these marketable securities continue to be measured at fair value, however the changes in net unrealized holding gains and losses are now recognized through net income. Subsequent to the fiscal yearend, on October 1, 2018, unrealized net holding losses of $24,744,579 were reclassed to beginning retained earnings to recognize the unrealized losses previously recorded in “accumulated other comprehensive income” on our consolidated balance sheets.
Revenue Recognition and Estimates
Rental revenue from tenants with leases having scheduled rental increases are recognized on a straight-line basis over the term of the lease. Tenant recoveries related to the reimbursement of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period the expenses are incurred. The reimbursements are recognized and presented gross, as we are generally, the primary obligor and, with respect to purchasing goods and services from third-party suppliers, hashave discretion in selecting the supplier and bearsbear the associated credit risk. These occupancy charges are recognized as earned. In addition, an estimate is made with respect to whether a provision for allowance for doubtful tenant and other receivables is necessary. The allowance for doubtful accounts reflects management’s estimate of the amounts of the recorded tenant and other receivables at the balance sheet date that will not be realized from cash receipts in subsequent periods. If cash receipts in subsequent periods vary from our estimates, or if our tenants’ financial condition deteriorates as a result of operating difficulties, additional changes to the allowance may be required. We did not have an allowance for doubtful accounts as of September 30, 2018 or 2017.
Lease Termination Income
Lease Termination Income is recognized in operating revenues when there is a signed termination agreement, all of the conditions of the agreement have been met, the tenant is no longer occupying the property and the termination consideration is probable of collection. Lease termination amounts are paid by tenants who want to terminate their lease obligations before the end of the contractual term of the lease agreement with us.
Two leases were set to expireWe did not recognize any lease termination fees during fiscal 2018 with Kellogg Sales Company (Kellogg) for our 65,067 square foot facility located in Kansas City, MO through July 31, 2018 and our 50,400 square foot facility located in Orangeburg, NY through February 28, 2018. Kellogg informed us that they would not be renewing these leases. On December 18, 2017,2020. During fiscal 2021, effective October 1, 2020, we sold our property, located in Kansas City, MO for $4,900,000, with net sale proceeds of approximately $4,602,000 and on December 22, 2017, we sold our property, located in Orangeburg, NY for $6,170,000, with net sale proceeds of approximately $5,898,000. The sale of these two properties resulted in a realized gain of approximately $5,388,000, representing a 105% gain over the depreciated U.S. GAAP basis and a realized net gain of approximately $1,804,000, representing a 21% net gain over our historic undepreciated cost basis. In conjunction with the sale of these two properties, we simultaneously entered into a lease termination agreement with RGH Enterprises, Inc. (Cardinal Health) for each propertyour 75,000 square foot facility located in Halfmoon (Albany), NY whereby we received a termination fee from Kellogg totalingin the amount of $377,000 representing approximately $210,000 which represents a weighted average of 80%50% of the then remaining rent due under the lease, which was set to expire on November 30, 2021. We simultaneously entered into a 10.4 year lease agreement with United Parcel Service, Inc. (UPS) which became effective November 1, 2020. The lease agreement with UPS provides for five months of free rent, after which, on April 1, 2021, initial annual rent of $510,000, representing $6.80 per square foot, commenced, with 2.0% annual increases thereafter, resulting in a straight-line annualized rent of $541,000, representing $7.21 per square foot over the life of the lease, which expires March 31, 2031. This compares to the former U.S. GAAP straight-line rent of $574,000, representing $7.65 per square foot, and former cash rent of $8.19 per square foot, resulting in a decrease of $33,000, representing a 5.8% decrease on a U.S. GAAP straight-line basis and a decrease of 17.0% on a cash basis. The new 10.4 year lease agreement with UPS provides for an additional 9.3 years of lease term versus the old lease with Cardinal Health. In addition, effective June 4, 2021, we completed a parking lot expansion at this location for a cost of approximately $835,000 resulting in an initial increase in annual rent effective on the date of completion of approximately $52,000 from approximately $510,000, or $6.80 per square foot, to approximately $562,000, or $7.50 per square foot. Furthermore, annual rent will continue to increase each respective lease.year by 2.0% resulting in an annualized rent from June 4, 2021 through the remaining term of the lease of approximately $622,000, or $8.29 per square foot.
Only fourthree of our 111122 properties have leases that contain an early termination provision. These fourthree properties contain approximately 184,000177,000 total rentable square feet, representing less than 1% of our total rentable square feet. Our leases with early termination provisions are our 26,340 square foot location in Ridgeland (Jackson), MS, our 36,27036,000 square foot location in Urbandale (Des Moines), IA, our 38,83339,000 square foot location in Rockford, IL and our 83,000102,000 square foot location in Roanoke, VA.O’Fallon (St. Louis), MO. Each lease termination provision contains certain requirements that must be met in order to exercise each termination provision. These requirements include: the date termination can be exercised, the time frame that notice must be given by the tenant to us and the termination fee that would be required to be paid by the tenant to us. The total potential termination fee tofees that would be paidpayable to us from the fourthree tenants with leases that have a termination provision amounts to approximately $1,694,000.$1.5 million.
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Results of Operations
Occupancy and Rent per Occupied Square Foot
Our weighted-average lease expiration was 8.1 years and 7.9 years as of September 30, 2018 and 2017, respectively, and our average annualized rent per occupied square foot as of September 30, 2018 and 2017 was $6.01 and $5.93, respectively. At September 30, 2018 and 2017, our occupancy was 99.6% and 99.3%, respectively.Fiscal 2021 Renewals
All improved properties were 100% occupied, except for one property located in Monaca (Pittsburgh), PA consisting of 255,658 rentable square feet, of which 68% or 174,802 square feet is occupied, resulting in a 99.6% overall occupancy percentage for our entire portfolio of properties.
Fiscal 2018 Renewals
In fiscal 2018,2021, approximately 8%5% of our gross leasable area, representing 16ten leases totaling 1,546,6371.2 million square feet, was set to expire. All ten of these leases have been renewed, resulting in a 100% retention rate for a weighted average term of 4.2 years, at a rental rate increase of 6.2% on a U.S. GAAP basis and an increase of 0.4% on a cash basis.
We have renewed 11incurred or we expect to incur leasing commission costs of the 16 leases that were set to expire during fiscal 2018, representing 1,063,824 square feet, or 69%$621,000 in connection with six of the expiring square footage. One of the 11 leases, which is with FedEx Ground Package System, Inc., for a property located in Hanahan (Charleston), SC, renewed for only four months, until November 30, 2018, because the tenant moved their operations from our 91,776 square foot facility to our newly constructed, much larger, 265,318 square foot facility, which is also located in Charleston, SCthese lease renewals and is leased to FedEx Ground Package System, Inc. for 15 years through June 2033. We closed on this new facility on August 15, 2018. Excluding the four month lease renewal at the 91,776 square foot location, the 10 leases that have renewed represent 972,048 square feet, or 63% of the expiring square footage. Wewe have incurred or we expect to incur tenant improvement costs of approximately $844,000 and leasing commission costs of approximately $898,000$756,000 in connection with five of these 10 lease renewals. The table below summarizes the lease terms of the 11 leases whichthat were renewed. In addition, the table below includes both the tenant improvement costs and the leasing commission costs, which are presented on a per square foot (PSF) basis averaged annually over the renewal term.terms.
Property | Tenant | Square Feet | Former U.S. GAAP Straight- Line Rent PSF | Former Cash Rent PSF | Former Lease Expiration | Renewal U.S GAAP Straight- Line Rent PSF | Renewal Initial Cash Rent PSF | Renewal Lease Expiration | Renewal Term (years) | Tenant Improvement Cost PSF over Renewal Term (1) | Leasing Commission Cost PSF over Renewal Term (1) | |||||||||||||||||||||||||||
Griffin (Atlanta), GA | Rinnai America Corporation | 218,120 | $ | 3.81 | $ | 3.93 | 12/31/20 | $ | 4.22 | $ | 4.22 | 12/31/22 | 2.0 | $ | -0- | $ | 0.13 | |||||||||||||||||||||
Fayetteville, NC | Victory Packaging, L.P. | 148,000 | 3.33 | 3.50 | 2/28/21 | 3.40 | 3.25 | 2/28/25 | 4.0 | -0- | 0.20 | |||||||||||||||||||||||||||
Winston-Salem, NC | Style Crest, Inc. | 106,507 | 3.39 | 3.77 | 3/31/21 | 4.10 | 3.90 | 3/31/26 | 5.0 | 0.30 | -0- | |||||||||||||||||||||||||||
Romulus, MI | FedEx Corporation | 71,933 | 5.15 | 5.15 | 5/31/21 | 5.95 | 5.95 | 5/31/26 | 5.0 | 0.56 | 0.12 | |||||||||||||||||||||||||||
Augusta, GA | FedEx Ground | 59,358 | 8.64 | 8.64 | 6/30/21 | 8.64 | 8.64 | 6/30/23 | 2.0 | -0- | -0- | |||||||||||||||||||||||||||
O’Fallon, MO | Pittsburgh Glass Works, LLC | 102,135 | 4.37 | 4.44 | 6/30/21 | 5.05 | 4.88 | 6/30/26 | 5.0 | 0.20 | -0- | |||||||||||||||||||||||||||
Corpus Christi, TX | FedEx Ground | 46,253 | 9.03 | 9.42 | 8/31/21 | 9.89 | 9.89 | 8/31/26 | 5.0 | -0- | -0- | |||||||||||||||||||||||||||
Kansas City, MO | Bunzl Distribution | 158,417 | 4.65 | 4.86 | 9/30/21 | 4.44 | 4.26 | 9/30/26 | 5.0 | -0- | 0.27 | |||||||||||||||||||||||||||
St. Joseph, MO | Woodstream Corporation | 256,000 | 3.57 | 3.70 | 9/30/21 | 3.89 | 3.75 | 9/30/26 | 5.0 | 0.14 | 0.12 | |||||||||||||||||||||||||||
Topeka, KS | Coca-Cola Bottling Co., LLC | 40,000 | 8.30 | 8.30 | 9/30/21 | 7.10 | 6.75 | 9/30/26 | 5.0 | 0.60 | 0.21 | |||||||||||||||||||||||||||
Total | 1,206,723 | |||||||||||||||||||||||||||||||||||||
Weighted Average | $ | 4.49 | $ | 4.64 | $ | 4.77 | $ | 4.66 | 4.2 | $ | 0.15 | $ | 0.12 |
Property | Tenant | Square Feet | Former U.S. GAAP Straight- Line Rent PSF | Former Cash Rent PSF | Former Lease Expiration | Renewal U.S GAAP Straight- Line Rent PSF | Renewal Initial Cash Rent PSF | Renewal Lease Expiration | Renewal Term (years) | Tenant Improvement Cost PSF over Renewal Term (1) | Leasing Commission Cost PSF over Renewal Term (1) | |||||||||||||||||||||||||||
Hanahan (Charleston), SC (3) | FedEx Ground | 91,776 | $ | 7.35 | $ | 7.35 | 07/31/18 | $ | 7.35 | $ | 7.35 | 11/30/18 | 0.3 | $ | -0- | $ | -0- | |||||||||||||||||||||
Chattanooga, TN | FedEx Express | 60,637 | $ | 5.13 | $ | 5.13 | 10/31/17 | $ | 5.26 | $ | 5.26 | 10/31/22 | 5.0 | $ | 0.44 | $ | 0.10 | |||||||||||||||||||||
Lakeland, FL | FedEx Express | 32,105 | 4.83 | 4.83 | 11/30/17 | 4.83 | 4.83 | 11/30/27 | 10.0 | 0.19 | 0.10 | |||||||||||||||||||||||||||
Orlando, FL | FedEx Express | 110,638 | 5.69 | 6.02 | 11/30/17 | 6.02 | 6.02 | 11/30/27 | 10.0 | 0.20 | 0.12 | |||||||||||||||||||||||||||
St. Joseph, MO | Altec Industries | 126,880 | 2.75 | 2.75 | 02/28/18 | 2.94 | 2.87 | 02/28/23 | 5.0 | -0- | 0.13 | |||||||||||||||||||||||||||
Edwardsville, KS | Carlisle Tire | 179,280 | 4.23 | 4.39 | 05/31/18 | 4.10 | 4.15 | 07/31/23 | 5.2 | 0.05 | 0.16 | |||||||||||||||||||||||||||
Augusta, GA | FedEx Ground | 59,358 | 7.64 | 7.64 | 06/30/18 | 8.64 | 8.64 | 06/30/21 | 3.0 | -0- | -0- | |||||||||||||||||||||||||||
O’Fallon, MO | Pittsburgh Glass Works | 102,135 | 4.18 | 4.18 | 06/30/18 | 4.37 | 4.31 | 06/30/21 | 3.0 | 0.08 | -0- | |||||||||||||||||||||||||||
Denver, CO | FedEx Ground | 69,865 | 8.08 | 8.08 | 07/31/18 | 8.72 | 8.72 | 10/31/25 | 7.3 | -0- | 0.17 | |||||||||||||||||||||||||||
Beltsville, MD | FedEx Ground | 148,881 | 9.58 | 9.58 | 07/31/18 | 9.77 | 9.77 | 07/31/28 | 10.0 | -0- | 0.20 | |||||||||||||||||||||||||||
Bedford Heights, OH | FedEx Express | 82,269 | 4.96 | 4.96 | 08/31/18 | 5.33 | 5.33 | 08/31/28 | 10.0 | 0.43 | 0.11 | |||||||||||||||||||||||||||
Total (2) | 972,048 | |||||||||||||||||||||||||||||||||||||
Weighted Average (2) | $ | 5.64 | $ | 5.71 | $ | 5.87 | $ | 5.87 | 6.8 | $ | 0.13 | $ | 0.14 |
(1) | Amount calculated based on the total cost divided by the square feet, divided by the renewal term. | |
Excluding the four-month lease renewal at the Hanahan (Charleston), SC location, the remaining 10
These ten lease renewals result inhave a weighted average term of 6.8 years and a renewed U.S. GAAP straight-line weighted average lease rate of $5.87$4.77 per square foot. The renewed weighted average initial cash rent per square foot is also $5.87 per square foot.$4.66. This compares to the former weighted average rent of $5.64 per square foot on a U.S. GAAP straight-line basis and the former weighted average cash rent of $5.71 per square foot, representing an increase in the weighted average lease rate of 4.1% on a U.S. GAAP straight-line basis and an increase of 2.8% on a cash basis.
As further discussed below and under Fiscal 2018 dispositions, of the five remaining leases originally set to expire during fiscal 2018 that did not renew, three of the properties were sold and one of the properties was re-tenanted. The three properties that were sold represent 12% of the expiring square footage for fiscal 2018, and one property, representing 14% of the expiring square footage for fiscal 2018, was re-tenanted for 3 years. The remaining lease that did not renew, expired on December 31, 2017 and represents 5% of the expiring square footage for fiscal 2018. This tenant leased 80,856 square feet at our 255,658 square foot industrial park located in Monaca (Pittsburgh), PA. This partially vacant property currently represents our only property with vacancy.
Another remaining lease that was set to expire during fiscal 2018 was leased to Caterpillar Logistics Services, Inc. (Caterpillar) at our 218,120 square foot facility located in Griffin, GA through December 31, 2017. In September 2017, we entered into a three year lease agreement with Rinnai America Corporation through December 31, 2020 for this location. The new lease commenced on January 1, 2018, with initial annual rent of $807,044, representing $3.70 per square foot, with 3.0% annual increases thereafter, resulting in a straight-line annualized rent of $831,000, representing $3.81 per square foot over the life of the lease. This compares to the former U.S. GAAP straight-line and the former cash rent of $5.36 per square foot, resulting in a decrease in the average lease rate of 28.9% on a U.S. GAAP straight-line basis and a decrease of 31.0% on a cash basis.
Other Fiscal 2018 Leasing Activity
Effective November 1, 2017, we entered into a 10.2 year lease agreement with FBM Gypsum Supply of Illinois, LLC for our 36,270 square foot facility located in Urbandale (Des Moines), IA. The lease agreement provided for two months of free rent, after which, on January 1, 2018, initial annual rent of $159,588, representing $4.40 per square foot commenced, with 2.0% annual increases thereafter, resulting in a straight-line annualized rent of approximately $172,000, representing $4.74 per square foot through the expiration date of the lease, which is December 31, 2027. This new rent compares to the former average rent of $3.56$4.49 per square foot on a U.S. GAAP straight-line basis and the former cash rent of $3.88$4.64 per square foot, representingresulting in an increase in the average lease rate of 33.1%6.2% on a U.S. GAAP straight-line basis and an increase of 13.4%0.4% on a cash basis.
Fiscal 2019 RenewalsEffective December 15, 2020, we entered into a 10.3 year lease with Hartford HealthCare Corporation for our previously vacant 55,000 square foot facility located in Newington (Hartford), CT. The new lease has free rent for the first four months, after which initial annual rent will be $288,000, representing $5.25 per square foot with 2.0% annual increases thereafter, resulting in a U.S. GAAP straight-line annualized rent of $307,000, representing $5.60 per square foot over the life of the lease. Hartford HealthCare Corporation is rated “investment-grade” as defined by S&P Global Ratings (www.standardandpoors.com) and by Moody’s (www.moodys.com).
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Fiscal 2022 Renewals
In fiscal 2019,2022, existing leases with respect to approximately 7%5% of our gross leasable area, representing 12seven leases totaling 1,485,7701.2 million square feet, is setwere scheduled to expire. AsTwo of the date of this Annual Report, 5 of the 12these seven leases have renewed. The five leases that havewere renewed thus far, for a weighted average term of 6.8 years, at a rental rate increase of 6.5% on a GAAP basis and flat on a cash basis. These two lease renewals represent 802,595104,000 square feet, or 54%9% of the expiring square footage scheduled to expire in fiscal 2022.
We have incurred or we expect to incur leasing commission costs of $220,000 in connection with one of these lease renewals and have a weighted average lease term of 8.4 years.
Wewe have incurred or we expect to incur tenant improvement costs of approximately $1,786,000 and leasing commission costs of approximately $991,000$50,000 in connection with these fivethe other lease renewals.renewal. The table below summarizes the lease terms of the fivetwo leases whichthat were renewed. In addition, the table below includes both the tenant improvement costs and the leasing commission costs, which are presented on a per square foot (PSF) basis averaged annually over the renewal term.terms.
Property | Tenant | Square Feet | Former U.S. GAAP Straight- Line Rent PSF | Former Cash Rent PSF | Former Lease Expiration | Renewal U.S GAAP Straight- Line Rent PSF | Renewal Initial Cash Rent PSF | Renewal Lease Expiration | Renewal Term (years) | Tenant Improvement Cost PSF over Renewal Term (1) | Leasing Commission Cost PSF over Renewal Term (1) | |||||||||||||||||||||||||||
Somerset, NJ | Taco Bell | 21,365 | $ | 4.68 | $ | 4.68 | 10/14/18 | $ | 5.15 | $ | 5.15 | 10/14/23 | 5.0 | $ | -0- | $ | -0- | |||||||||||||||||||||
Carrollton (Dallas), TX | Carrier Enterprise | 184,317 | 8.20 | 8.55 | 01/11/19 | 6.24 | 6.00 | 01/31/24 | 5.0 | 0.20 | 0.39 | |||||||||||||||||||||||||||
Lebanon (Cincinnati), OH (2) | Siemens Real Estate | 51,130 | 8.82 | 9.67 | 04/30/19 | 8.94 | 8.50 | 04/30/24 | 5.0 | 0.40 | 0.40 | |||||||||||||||||||||||||||
Memphis, TN (2) | FedEx Express | 449,900 | 2.84 | 2.95 | 05/31/19 | 3.10 | 3.10 | 05/31/29 | 10.0 | 0.30 | 0.09 | |||||||||||||||||||||||||||
Jacksonville, FL | FedEx Express | 95,883 | 5.40 | 5.40 | 05/31/19 | 5.59 | 5.59 | 05/31/29 | 10.0 | 0.16 | 0.11 | |||||||||||||||||||||||||||
Total | 802,595 | |||||||||||||||||||||||||||||||||||||
Weighted Average | $ | 4.81 | $ | 5.00 | $ | 4.55 | $ | 4.46 | 8.4 | $ | 0.26 | $ | 0.15 |
Property | Tenant | Square Feet | Former U.S. GAAP Straight- Line Rent PSF | Former Cash Rent PSF | Former Lease Expiration | Renewal U.S GAAP Straight- Line Rent PSF | Renewal Initial Cash Rent PSF | Renewal Lease Expiration | Renewal Term (years) | Tenant Improvement Cost PSF over Renewal Term (1) | Leasing Commission Cost PSF over Renewal Term (1) | |||||||||||||||||||||||||||
Houston, TX | National Oilwell Varco | 91,925 | $ | 8.26 | $ | 8.44 | 9/30/22 | $ | 8.88 | $ | 8.44 | 9/30/29 | 7.0 | $ | -0- | $ | 0.34 | |||||||||||||||||||||
Burr Ridge, IL | Sherwin-Williams | 12,500 | 12.80 | 12.94 | 10/31/21 | 12.99 | 12.94 | 10/31/26 | 5.0 | 0.80 | -0- | |||||||||||||||||||||||||||
Total | 104,425 | |||||||||||||||||||||||||||||||||||||
Weighted Average | $ | 8.80 | $ | 8.98 | $ | 9.37 | $ | 8.98 | 6.8 | $ | 0.07 | $ | 0.31 |
(1) | Amount calculated based on the total cost divided by the square feet, divided by the renewal term. | |
These fivetwo lease renewals result in a weighted average term of 8.4 years andhave a U.S. GAAP straight-line weighted average lease rate of $4.55$9.37 per square foot. The renewed weighted average initial cash rent per square foot is $4.46.$8.98. This compares to the former weighted average rent of $4.81$8.80 per square foot on a U.S. GAAP straight-line basis and the former weighted average cash rent of $5.00$8.98 per square foot, resulting in a decrease in the weighted average lease ratean increase of 5.4%6.5% on a U.S. GAAP straight-line basis and a decrease in the weighted average lease rate of 10.8%flat on a cash basis.
As discussed above, in the Fiscal 2018 Renewal section, our 91,776Our 105,000 square foot facility located in Hanahan (Charleston)Cheektowaga (Buffalo), SC, was leased to FedEx Ground Package System, Inc. and renewed for only four months, until November 30, 2018 because the tenant moved their operations from our 91,776 square foot facility to our newly constructed, much larger, 265,318 square foot facility, which is also located in Charleston, SC. The new 265,318 square foot facilityNY is leased to FedEx Ground Package System,Sonwil Distribution Center, Inc. for 15 years through June 2033. In addition, Carrier Enterprise, LLC (United Technologies)January 31, 2022. This tenant informed us that they will not be renewing their lease. We recently entered into a new seven-year lease agreement for this facility with UPS which becomes effective February 1, 2022 through January 31, 2029. The lease with UPS provides for initial annual rent of $683,000, representing $6.50 per square foot with 2.0% annual increases thereafter, resulting in a U.S. GAAP straight-line annualized rent of $725,000, representing $6.90 per square foot over the life of the lease. This compares to the former U.S. GAAP straight-line rent and former cash rent of $6.00 per square foot, resulting in an increase in the average lease rate of 15.0% on a U.S. GAAP straight-line basis and an increase of 8.3% on a cash basis. This lease to UPS, along with the two lease renewals in the table above, results in a weighted average term of 6.9 years, at a rental rate increase of 10.0% on a GAAP basis and an increase of 3.3% on a cash basis. These three leases represent 209,000 square feet, or 18% of the expiring square footage for fiscal 2022.
Also not included in the table above is our 60,000185,000 square foot facility located in Richmond, VA which expires onGranite City (St. Louis, MO), IL that is leased to Anheuser-Busch through November 30, 2018. Both our 91,776 square foot facility located2021. Anheuser-Busch renewed for only four months, until March 31, 2022, after which it is expected that they will be moving out. The four month extension provides for rent at an annualized rate of 150% of its current rent resulting in Hanahan (Charleston), SC and our 60,000 square foot facility located in Richmond, VA are currently being marketed.
On September 30, 2018, we had a weighted average lease maturity of 8.1 years with 7.5% of the weighted average grossan annualized rent scheduledof $1.3 million, representing $7.04 per square foot. This compares to expire each year.the former U.S. GAAP straight-line rent of $4.36 and former cash rent of $4.70 per square foot.
Acquisitions, Expansions and Dispositions During Fiscal 20182021 Acquisitions
Fiscal 2018 Acquisitions
On November 2, 2017,December 17, 2020, we purchased a newly constructed 121,683500,000 square foot industrial building, situated on 16.2100.0 acres, located in Charleston, SC. The building is 100% net-leased to FedEx Corporation (FDX), for 15 years through August 2032. The purchase price was $21,872,170. We obtained a 15 year fully-amortizing mortgage loan of $14,200,000 at a fixed interest rate of 4.23%. Annual rental revenue over the remaining term of the lease averages approximately $1,315,000.
On November 30, 2017, we purchased a newly constructed 300,000 square foot industrial building, situated on 123.0 acres, located in Oklahoma City, OK. The building is 100% net-leased to Amazon.com Services, Inc. for 10 years through October 2027. The lease is guaranteed by Amazon.com, Inc. The purchase price was $30,250,000. We obtained a 10 year mortgage loan, amortizing over 18 years, of $19,600,000 at a fixed interest rate of 3.64%. Annual rental revenue over the remaining term of the lease averages approximately $1,884,000.
On January 22, 2018, we purchased a newly constructed 831,764 square foot industrial building, situated on 62.4 acres, located in Savannah, GA. The building is 100% net-leased to Shaw Industries, Inc. for 10 years through September 2027. The purchase price was $57,483,636. We obtained a 14 year fully-amortizing mortgage loan of $33,300,000 at a fixed interest rate of 3.53%. Annual rental revenue over the remaining term of the lease averages approximately $3,551,000.
On April 6, 2018, we purchased a newly constructed 399,440 square foot industrial building, situated on 27.5 acres, located in Daytona Beach, FL. The building is 100% net-leased to B. Braun Medical Inc. for 10 years through April 2028. The purchase price was $30,750,540. We obtained a 15 year fully-amortizing mortgage loan of $19,500,000 at a fixed interest rate of 4.25%. Annual rental revenue over the remaining term of the lease averages approximately $2,130,000.
On June 28, 2018, we purchased a newly constructed 362,942 square foot industrial building, situated on 31.3 acres, located in Mobile, AL. The building is 100% net-leased to Amazon.com Services, Inc. for 11 years through November 2028. The lease is guaranteed by Amazon.com, Inc. The purchase price was $33,688,276. We obtained a 14 year fully-amortizing mortgage loan of $19,000,000 at a fixed interest rate of 4.14%. Annual rental revenue over the remaining term of the lease averages approximately $2,020,000.
On August 15, 2018, we purchased a newly constructed 265,318 square foot industrial building, situated on 48.9 acres, located in Charleston, SC.Columbus, OH MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through June 2033.September 2035. The purchase price was $47,174,296.$73.3 million. We obtained a 15 year, fully-amortizing mortgage loan of $29,860,000$47.0 million at a fixed interest rate of 3.82%2.95%. Annual rental revenue over the remaining term of the lease averages approximately $2,713,000.$4.6 million.
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On September 6, 2018,December 24, 2020, we purchased a newly constructed 373,750658,000 square foot industrial building, situated on 92.6130.2 acres, located in Braselton,the Atlanta, GA whichMSA. The building is 100% net-leased to Home Depot U.S.A., Inc. for 20 years through November 2040. The purchase price was $95.9 million. We obtained a 17 year, fully-amortizing mortgage loan of $57.0 million at a fixed interest rate of 3.25%. Annual rental revenue over the remaining term of the lease averages $5.5 million.
On July 29, 2021, we purchased a newly constructed 144,000 square foot industrial building, situated on 43.4 acres, located in the Atlanta Metropolitan Statistical Area (MSA) .Burlington, VT MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through February 2033.May 2036. The property was acquired for a purchase price was $61,113,264. We obtained a 15 year fully-amortizing mortgage loan of $39,700,000 at a fixed interest rate of 4.02%.$54.8 million. Annual rental revenue over the remaining term of the lease averages approximately $3,801,000.$3.2 million. Subsequent to the closing of the purchase, we obtained a mortgage loan commitment for a 15 year, fully-amortizing mortgage loan of $35.5 million at a fixed interest rate of 2.50%.
On August 25, 2021, we purchased a newly constructed 259,000 square foot industrial building, situated on 42.6 acres, located in the Knoxville, TN MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through May 2036. The property was acquired for a purchase price of $34.4 million. Annual rental revenue over the remaining term of the lease averages $2.0 million. Subsequent to the closing of the purchase, we obtained a mortgage loan commitment for a 15 year, fully-amortizing mortgage loan of $22.3 million at a fixed interest rate of 2.50%.
Subsequent to fiscal yearend, on October 27, 2021, we purchased a newly constructed 291,000 square foot industrial building, situated on 46.0 acres, located in the Birmingham, AL MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through July 2036. The property was acquired for a purchase price of $30.2 million. Annual rental revenue over the remaining term of the lease averages $1.7 million. We obtained a mortgage loan commitment for a 15 year, fully-amortizing mortgage loan of $19.3 million at a fixed interest rate of 2.40%, which has not yet closed.
FedEx Ground Package System, Inc.’s ultimate parent, FDX, Amazon.com, Inc.FedEx Corporation, and Shaw Industries, Inc.’sHome Depot U.S.A., Inc’s ultimate parent, Berkshire Hathaway,Home Depot, Inc., are publicly-ownedpublicly-listed companies and financial information related to these entities isare available at the SEC’s website,www.sec.gov. The references in this report to the SEC’s website are not intended to and do not include, or incorporate by reference into this report, the information on thewww.sec.gov website.
Fiscal 2018 Expansions2021 Disposition
On November 1, 2017, a parking lot expansion for a property leased to FedEx Ground Package System, Inc., a subsidiary of FDX, located in Indianapolis, IN was completed for a total project cost of approximately $1,683,000, resulting in a new 10 year lease which extended the prior lease expiration date from April 2024 to October 2027. In addition, the expansion resulted in an increase in annual rent effective from the date of completion of approximately $184,000 from approximately $1,533,000, or $4.67 per square foot, to approximately $1,717,000, or $5.24 per square foot.
On September 27, 2018, a parking lot expansion for a property leased to FedEx Ground Package System, Inc., located in Ft. Mill, SC was completed for a total project cost of approximately $1,834,000, resulting in a new 10 year lease which extended the prior lease expiration date from October 2023 to August 2028. In addition, the expansion resulted in an increase in annual rent effective from the date of completion of approximately $183,000 from approximately $1,415,000, or $8.00 per square foot, to approximately $1,598,000, or $9.03 per square foot.
Fiscal 2018 Dispositions
Two leases were set to expire during fiscal 2018 with Kellogg Sales Company (Kellogg) for our 65,067 square foot facility located in Kansas City, MO through July 31, 2018 and our 50,400 square foot facility located in Orangeburg, NY through February 28, 2018. Kellogg informed us that they would not be renewing these leases. On December 18, 2017,15, 2021, we sold our property located in Kansas City, MO for $4,900,000, with net sale proceeds of approximately $4,602,000 and, on December 22, 2017, we sold our property located in Orangeburg, NY for $6,170,000, with net sale proceeds of approximately $5,898,000. In conjunction with the sale of these two properties, we simultaneously entered into a lease termination agreement for each property whereby we received a termination fee from Kellogg totaling approximately $210,000 which represents a weighted average of 80% of the then remaining rent due under each respective lease.
On June 1, 2018, we sold a 68,37060,400 square foot building located in Colorado Springs, COCarlstadt, NJ which is in the New York, NY MSA, for $5,800,000, with net sale proceeds of approximately $5,465,000.$13.0 million. Prior to the sale, we owned a 51% interest in this property. Our 51% portion of this property, it was leased to FedEx Ground Package System, Inc. through September 2018. The tenant informed us that they would not be renewing this lease because they have moved their operations from our former 68,370 square foot facility to our newly constructed 225,362 square foot facility, which is also located in Colorado Springs, CO. On June 9, 2016, we purchased this newly constructed 225,362 square foot industrial building, which is leased to FedEx Ground Package System, Inc. for 10 years through January 2026.
On June 5, 2018, we sold an 87,500 square foot vacant building located in Ft. Myers, FL for $6,400,000, with netthe sale proceeds of approximately $6,119,000. Prior to this property becoming vacant, it was leased to FedEx Ground Package System, Inc. through June 2017. FedEx Ground Package System, Inc. vacated this property because they moved their operations from our former 87,500 square foot facility to our newly constructed 213,672 square foot facility, which is also located in Ft. Myers, FL. We purchased this newly constructed facility on December 30, 2016 and it is leased to FedEx Ground Package System, Inc. for 10 years through August 2027.
These four properties sold during fiscal 2018, resulted in a U.S. GAAP net realized gain applicable to common shareholders of approximately $7,485,000,$3.3 million, representing a 51%159% gain over the depreciated U.S. GAAP basis and a net realized gain over our historic undepreciated cost basis of approximately $1,160,000,$2.6 million, representing a 6%96% net gain over our historic undepreciated cost basis.
Comparison of Year Ended September 30, 20182021 to Year Ended September 30, 20172020
The following tables summarize our rental revenue, reimbursement revenue, real estate taxes, operating expenses, and depreciation expense by category. For the purposes of the following discussion, same propertiesSame Properties are properties owned as of October 1, 20162019 that have not been subsequently expanded or sold.
Acquired Properties are properties that were acquired subsequent to September 30, 2016. Seventeen2019. Nine properties were acquired during fiscal 20182021 and fiscal 2017.2020. Acquired propertiesProperties include the properties located in Hamburg (Buffalo)Greenwood (Indianapolis), NY; Ft. Myers, FL; Walker (Grand Rapids)IN; Lancaster (Columbus),OH; Whitsett (Greensboro), MI; Mesquite (Dallas)NC; Ogden (Salt Lake City), TX; Aiken (Augusta, GA), SC; Homestead (Miami), FL;UT and Oklahoma City, OK (Bunzl Distribution Oklahoma, Inc.); Concord (Charlotte) NC; Kenton, OH and Stow, OH (all acquired in fiscal 2017)2020) and Charleston, SC (FDX); OklahomaPlain City OK (Amazon.com Services, Inc.); Savannah,(Columbus), OH; Locust Grove (Atlanta), GA; Daytona Beach, FL; Mobile, AL; Charleston, SC (FDX Ground)Burlington, VT and Braselton (Atlanta)Kodak (Knoxville), GATN (all acquired in fiscal 2018)2021).
Expanded Properties include properties that were expanded subsequent to September 30, 2019. During fiscal 20182021 and 2017,2020, there were fourtwo property expansions completed at the properties located in Edinburg, TX; Ft. Myers, FL; Indianapolis, INOlathe (Kansas City), KS and Ft. Mill, SC. ExpandedHalfmoon (Albany), NY.
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Sold Properties include these properties that were expanded subsequent to September 30, 2016, with the exception of the property located in Ft. Myers, FL. Since this property was acquired in fiscal 2017 and subsequently expanded, it is therefore included in Acquired Properties instead of being included in Expanded Properties.
Sold property consists of four propertiesone property we sold during fiscal 20182021 which was a 60,400 square foot building located in Kansas City, MO; Orangeburg, NY; Colorado Springs, CO and Ft. Myers, FL and one property sold during fiscal 2017 locatedCarlstadt, NJ which is in White Bear Lake (Minneapolis/St. Paul), MN.the New York, NY MSA, for a gross sales price of $13.0 million. Prior to the sale, we owned a 51% interest in this property.
As of September 30, 20182021 and 2017,2020, the overall occupancy ratesrate of our total property portfolio were 99.6%was 99.7% and 99.3%99.4%, respectively.
Rental Revenues | 2018 | 2017 | $ Change | % Change | ||||||||||||||||||||||||||||
Rental Revenues ($ in thousands) | 2021 | 2020 | $ Change | % Change | ||||||||||||||||||||||||||||
Same Properties | $ | 84,576,670 | $ | 84,905,418 | $ | (328,748 | ) | 0 | % | $ | 132,351 | $ | 131,882 | $ | 469 | 0 | % | |||||||||||||||
Acquired Properties | 26,492,913 | 7,086,464 | 19,406,449 | 274 | % | 19,442 | 6,846 | 12,596 | 184 | % | ||||||||||||||||||||||
Expanded Properties | 4,220,958 | 4,045,681 | 175,277 | 4 | % | 3,053 | 2,685 | 368 | 14 | % | ||||||||||||||||||||||
Sold Properties | 573,578 | 1,622,215 | (1,048,637 | ) | (65 | %) | 198 | 170 | 28 | 16 | % | |||||||||||||||||||||
Total | $ | 115,864,119 | $ | 97,659,778 | $ | 18,204,341 | 19 | % | $ | 155,044 | $ | 141,583 | $ | 13,461 | 10 | % |
The increase in rental revenues is mainly due to the increase from the newly Acquired Properties.
Reimbursement Revenues ($ in thousands) | 2021 | 2020 | $ Change | % Change | ||||||||||||
Same Properties | $ | 26,098 | $ | 25,244 | $ | 854 | 3 | % | ||||||||
Acquired Properties | 1,022 | 326 | 696 | 213 | % | |||||||||||
Expanded Properties | 475 | 477 | (2 | ) | 0 | % | ||||||||||
Sold Properties | 117 | 187 | (70 | ) | (37 | )% | ||||||||||
Total | $ | 27,712 | $ | 26,234 | $ | 1,478 | 6 | % |
Our single-tenant properties are subject to net leases, which require the tenants to absorb the real estate taxes, insurance and the majority of the repairs and maintenance. As such, we are reimbursed by the tenants for these expenses. Therefore, the increase in reimbursement revenues is offset by the increase in Real Estate Taxes and the increase in Operating Expenses, which includes insurance, repairs and maintenance and other operating expenses. The increase in reimbursement revenues from Same Properties is due to the increase in Same Properties real estate taxes and operating expenses reimbursed to us from our tenants. In addition, the increase in reimbursement revenues is also due to the increase from the newly Acquired Properties. For the fiscal years ended September 30, 2021 and 2020, Reimbursement Revenue as a percentage of Real Estate Taxes and Operating Expenses was 96.3% and 96.8%, respectively.
Real Estate Taxes ($ in thousands) | 2021 | 2020 | $ Change | % Change | ||||||||||||
Same Properties | $ | 20,696 | $ | 19,408 | $ | 1,288 | 7 | % | ||||||||
Acquired Properties | 580 | 209 | 371 | 178 | % | |||||||||||
Expanded Properties | 460 | 463 | (3 | ) | (1 | %) | ||||||||||
Sold Properties | 62 | 113 | (51 | ) | (45 | %) | ||||||||||
Total | $ | 21,798 | $ | 20,193 | $ | 1,605 | 8 | % |
The increase in real estate taxes is mainly due to the increase in assessment values from Same Properties, which were mostly billed back to the tenants and offset the increase in the Reimbursement Revenues from Same Properties. Additionally, the increase is due to the newly Acquired Properties.
Operating Expenses ($ in thousands) | 2021 | 2020 | $ Change | % Change | ||||||||||||
Same Properties | $ | 6,517 | $ | 6,761 | $ | (244 | ) | (4 | %) | |||||||
Acquired Properties | 351 | 39 | 312 | 800 | % | |||||||||||
Expanded Properties | 50 | 37 | 13 | 35 | % | |||||||||||
Sold Properties | 66 | 82 | (16 | ) | (20 | %) | ||||||||||
Total | $ | 6,984 | $ | 6,919 | $ | 65 | 1 | % |
The increase in operating expenses is mainly due to the newly Acquired Properties.
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Net Operating Income (NOI)* ($ in thousands) | 2021 | 2020 | $ Change | % Change | ||||||||||||
Same Properties | $ | 131,236 | $ | 130,959 | $ | 277 | 0 | % | ||||||||
Acquired Properties | 19,533 | 6,924 | 12,609 | 182 | % | |||||||||||
Expanded Properties | 3,018 | 2,662 | 356 | 13 | % | |||||||||||
Sold Properties | 187 | 160 | 27 | 17 | % | |||||||||||
Total | $ | 153,974 | $ | 140,705 | $ | 13,269 | 9 | % |
The increase in NOI is mainly due to the newly Acquired Properties.
* The revenue and expense items related to property operations discussed above are components of NOI which are recurring Rental and Reimbursement Revenue, less Real Estate Taxes and Operating Expenses. NOI is a non-GAAP performance measure. See “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operation – Overview” for a reconciliation of our Net Operating Income to our Net Income (Loss) Attributable to Common Shareholders.
Depreciation ($ in thousands) | 2021 | 2020 | $ Change | % Change | ||||||||||||
Same Properties | $ | 42,958 | $ | 42,855 | $ | 103 | 0 | % | ||||||||
Acquired Properties | 7,228 | 2,611 | 4,617 | 177 | % | |||||||||||
Expanded Properties | 1,010 | 865 | 145 | 17 | % | |||||||||||
Sold Properties | 52 | 105 | (53 | ) | (50 | %) | ||||||||||
Corporate Office | 230 | 234 | (4 | ) | (2 | %) | ||||||||||
Total | $ | 51,478 | $ | 46,670 | $ | 4,808 | 10 | % |
The increase in depreciation expense is mainly due to the newly acquired properties.
Interest Expense, excluding Amortization of Financing Costs ($ in thousands) | 2021 | 2020 | $ Change | % Change | ||||||||||||
Same Properties | $ | 26,215 | $ | 28,579 | $ | (2,364 | ) | (8 | %) | |||||||
Acquired Properties | 6,085 | 2,465 | 3,620 | 147 | % | |||||||||||
Expanded Properties | 670 | 720 | (50 | ) | (7 | %) | ||||||||||
Sold Properties | 170 | 69 | 101 | 146 | % | |||||||||||
Loans Payable | 3,356 | 3,130 | 226 | 7 | % | |||||||||||
Total | $ | 36,496 | $ | 34,963 | $ | 1,533 | 4 | % |
The increase in interest expense was mainly due to the increase in Acquired Properties due to two new loans totaling $104.0 million for properties acquired in Plain City (Columbus), OH and Locust Grove (Atlanta), GA. The decrease in Same Properties was mainly due to the reduction in the outstanding fixed rate mortgage balances related to these properties. The outstanding fixed rate mortgage balances related to these properties was reduced due to regularly scheduled principal amortization payments made during fiscal 2021, including the repayment of four mortgage loans for our properties located in Kansas City, MO, Topeka, KS, Carlstadt (New York, NY), NJ and Houston, TX. These four loans were at a weighted average interest rate of 5.35%. The weighted average interest rate on our fixed rate debt decreased from 3.98% as of September 30, 2020 to 3.86% as of September 30, 2021. In addition, the increase in interest expense for Sold Properties is due to a $134,000 prepayment penalty included in interest expense that was incurred when the mortgage was paid off in connection with the sale of the property located in Carlstadt (New York, NY), NJ. The increase in interest expense for Loans Payable is due to a $175.0 million increase in the outstanding Loan Payable balance ($90.0 million was drawn down during the third quarter of fiscal 2021 and $85.0 million was drawn down during the fourth quarter of fiscal 2021) from September 30, 2020 to September 30, 2021 offset by a decrease in the weighted average interest rate from 2.92% as of September 30, 2020 to 1.95% as of September 30, 2021.
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General and Administrative Expenses
General and administrative expenses increased $421,000, or 5%, during fiscal 2021 as compared to fiscal 2020. The increase was primarily due to purchasing a Director & Officer Insurance Policy and an increase in Franchise Taxes. General and administrative expenses, as a percentage of gross revenue, (which includes Rental Revenue, Reimbursement Revenue and Dividend Income), remained flat at 5.0% for fiscal year 2021 and 2020. General and administrative expenses, as a percentage of undepreciated assets (which is our total assets excluding accumulated depreciation), decreased by 7.5% to 37 basis points from 40 basis points for the fiscal years 2021 and 2020, respectively.
Non-recurring Strategic Alternatives & Proxy Costs
During the fiscal year 2021, we incurred Non-recurring Strategic Alternatives & Proxy Costs of $35.9 million related to the strategic alternatives review process approved by our Board of Directors, our proposed merger with EQC and the related shareholder meeting and proxy processes, the termination of the EQC merger agreement (including reimbursement of certain transaction expenses incurred by EQC), the Release and Settlement Agreement and the Cooperation Agreement with our former general counsel and Blackwells.
Dividend Income
Many REITs reduced their dividends in 2020 due to the COVID-19 Pandemic. Dividend Income decreased $4.3 million, or 41%, during fiscal 2021 as compared to fiscal 2020. This decrease is due to reduced dividends from our REIT securities portfolio. The REIT securities portfolio’s weighted average yield was approximately 4.5% during fiscal 2021 as compared to 6.4% for fiscal 2020. We held $143.5 million in marketable REIT securities as of September 30, 2021, representing 5.6% of our undepreciated assets.
Preferred Dividend Expense
Preferred Dividend Expense increased $6.9 million, or 26%, during fiscal 2021 as compared to fiscal 2020. This increase is due to the 3.1 million shares we sold of our 6.125% Series C Preferred Stock under the Preferred Stock ATM Program during the first quarter of the fiscal year ended September 30, 2021 at a weighted average price of $24.88 per share which generated net proceeds, after offering expenses, of $76.0 million.
Comparison of Year Ended September 30, 2020 to Year Ended September 30, 2019
The following tables summarize our rental revenue, reimbursement revenue, real estate taxes, operating expenses, and depreciation expense by category. For the purposes of the following discussion, Same Properties are properties owned as of October 1, 2018 that have not been subsequently expanded properties.or sold.
Reimbursement Revenues | 2018 | 2017 | $ Change | % Change | ||||||||||||
Same Properties | $ | 19,056,041 | $ | 17,259,734 | $ | 1,796,307 | 10 | % | ||||||||
Acquired Properties | 3,048,604 | 285,207 | 2,763,397 | 969 | % | |||||||||||
Expanded Properties | 837,855 | 750,966 | 86,889 | 12 | % | |||||||||||
Sold Properties | 355,230 | 429,620 | (74,390 | ) | (17 | %) | ||||||||||
Total | $ | 23,297,730 | $ | 18,725,527 | $ | 4,572,203 | 24 | % |
Acquired Properties are properties that were acquired subsequent to September 30, 2018. Eight properties were acquired during fiscal 2020 and fiscal 2019. Acquired Properties include the properties located in Trenton, NJ; Savannah, GA and Lafayette, IN (all acquired in fiscal 2019) and Greenwood (Indianapolis), IN; Lancaster (Columbus),OH; Whitsett (Greensboro), NC; Ogden (Salt Lake City), UT and Oklahoma City, OK (all acquired in fiscal 2020).
Expanded Properties include properties that were expanded subsequent to September 30, 2018. During fiscal 2020 and 2019, there was one property expansion completed at the property located in Monroe (Cincinnati), OH.
As of September 30, 2020 and 2019, the overall occupancy rate of our total property portfolio was 99.4% and 98.9%, respectively.
Rental Revenues ($ in thousands) | 2020 | 2019 | $ Change | % Change | ||||||||||||
Same Properties | $ | 123,882 | $ | 123,821 | $ | 61 | 0 | % | ||||||||
Acquired Properties | 15,653 | 7,073 | 8,580 | 121 | % | |||||||||||
Expanded Properties | 2,048 | 1,630 | 418 | 26 | % | |||||||||||
Total | $ | 141,583 | $ | 132,524 | $ | 9,059 | 7 | % |
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The increase in rental revenues is mainly due to the increase from the newly Acquired Properties and Expanded Properties.
Reimbursement Revenues ($ in thousands) | 2020 | 2019 | $ Change | % Change | ||||||||||||
Same Properties | $ | 24,443 | $ | 21,925 | $ | 2,518 | 11 | % | ||||||||
Acquired Properties | 1,750 | 358 | 1,392 | 389 | % | |||||||||||
Expanded Properties | 41 | 14 | 27 | 193 | % | |||||||||||
Total | $ | 26,234 | $ | 22,297 | $ | 3,937 | 18 | % |
Our single tenantsingle-tenant properties are subject to net leases, which require the tenants to absorb the real estate taxes, insurance and the majority of the repairs and maintenance. As such, we are reimbursed by the tenants for these expenses. Therefore, the increase in reimbursement revenues is offset by the increase in Real Estate Taxes and the increase in Operating Expenses, which includes insurance, repairs and maintenance and other operating expenses. In addition, the increase in reimbursement revenues is mainly due to the increase from the newly acquired properties.Acquired Properties. The increase in reimbursement revenues from Same Properties is due to the increase in Same Properties real estate taxes and operating expenses reimbursed to useus from our tenants. For the fiscal years ended September 30, 2020 and 2019, Reimbursement Revenue as a percentage of Real Estate Taxes and Operating Expenses was 96.8% and 95.0%, respectively.
Real Estate Taxes | 2018 | 2017 | $ Change | % Change | ||||||||||||||||||||||||||||
Real Estate Taxes ($ in thousands) | 2020 | 2019 | $ Change | % Change | ||||||||||||||||||||||||||||
Same Properties | $ | 15,274,719 | $ | 14,021,691 | $ | 1,253,028 | 9 | % | $ | 18,571 | $ | 16,658 | $ | 1,913 | 11 | % | ||||||||||||||||
Acquired Properties | 2,314,184 | 183,102 | 2,131,082 | 1164 | % | 1,622 | 352 | 1,270 | 361 | % | ||||||||||||||||||||||
Expanded Properties | 795,408 | 710,196 | 85,212 | 12 | % | -0- | -0- | -0- | 0 | % | ||||||||||||||||||||||
Sold Properties | 211,928 | 351,645 | (139,717 | ) | (40 | )% | ||||||||||||||||||||||||||
Total | $ | 18,596,239 | $ | 15,266,634 | $ | 3,329,605 | 22 | % | $ | 20,193 | $ | 17,010 | $ | 3,183 | 19 | % |
The increase in real estate taxes is mainly due to the newly acquired properties. The increase from same properties is mainly due to an increase in assessment values.values from Same Properties, which were mostly billed back to the tenants and offset the increase in the Reimbursement Revenues from Same Properties. Additionally, the increase is due to the newly Acquired Properties.
Operating Expenses | 2018 | 2017 | $ Change | % Change | ||||||||||||||||||||||||||||
Operating Expenses ($ in thousands) | 2020 | 2019 | $ Change | % Change | ||||||||||||||||||||||||||||
Same Properties | $ | 4,791,211 | $ | 4,410,009 | $ | 381,202 | 9 | % | $ | 6,789 | $ | 6,402 | $ | 387 | 6 | % | ||||||||||||||||
Acquired Properties | 789,115 | 124,946 | 664,169 | 532 | % | 113 | 42 | 71 | 169 | % | ||||||||||||||||||||||
Expanded Properties | 103,660 | 88,025 | 15,635 | 18 | % | 17 | 20 | (3 | ) | (15 | %) | |||||||||||||||||||||
Sold Properties | 109,892 | 264,942 | (155,050 | ) | (59 | %) | ||||||||||||||||||||||||||
Total | $ | 5,793,878 | $ | 4,887,922 | $ | 905,956 | 19 | % | $ | 6,919 | $ | 6,464 | $ | 455 | 7 | % |
The increase in operating expenses is mainly due to the repair and maintenance at Same Properties, which were mostly billed back to the tenants and offset the increase in the Reimbursement Revenues from Same Properties. Additionally, the increase is due to the newly acquired properties.Acquired Properties.
Net Operating Income (NOI)* | 2018 | 2017 | $ Change | % Change | ||||||||||||||||||||||||||||
Net Operating Income (NOI)* ($ in thousands) | 2020 | 2019 | $ Change | % Change | ||||||||||||||||||||||||||||
Same Properties | $ | 83,566,781 | $ | 83,733,452 | $ | (166,671 | ) | 0 | % | $ | 122,995 | $ | 122,687 | $ | 308 | 0 | % | |||||||||||||||
Acquired Properties | 26,438,218 | 7,063,623 | 19,374,595 | 274 | % | 15,668 | 7,037 | 8,631 | 123 | % | ||||||||||||||||||||||
Expanded Properties | 4,159,745 | 3,998,426 | 161,319 | 4 | % | 2,042 | 1,623 | 419 | 26 | % | ||||||||||||||||||||||
Sold Properties | 606,988 | 1,435,248 | (828,260 | ) | (58 | %) | ||||||||||||||||||||||||||
Total | $ | 114,771,732 | $ | 96,230,749 | $ | 18,540,983 | 19 | % | $ | 140,705 | $ | 131,347 | $ | 9,358 | 7 | % |
The increase in NOI is mainly due to the newly acquired properties and expanded properties.Acquired Properties.
* The revenue and expense items related to property operations discussed above are components of NOI which are recurring Rental and Reimbursement Revenue, less Real Estate Taxes and Operating Expenses. NOI is a non-GAAP performance measure. See “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operation – Overview” for a reconciliation of our Net Operating Income to our Net Income (Loss) Attributable to Common Shareholders.
Depreciation | 2018 | 2017 | $ Change | % Change | ||||||||||||
Same Properties | $ | 25,695,488 | $ | 25,607,021 | $ | 88,467 | 0 | % | ||||||||
Acquired Properties | 9,223,271 | 2,399,641 | 6,823,630 | 284 | % | |||||||||||
Expanded Properties | 1,218,756 | 1,157,830 | 60,926 | 5 | % | |||||||||||
Sold Properties | 38,408 | 470,506 | (432,098 | ) | (92 | %) | ||||||||||
Total | $ | 36,175,923 | $ | 29,634,998 | $ | 6,540,925 | 22 | % |
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Depreciation ($ in thousands) | 2020 | 2019 | $ Change | % Change | ||||||||||||
Same Properties | $ | 40,189 | $ | 39,554 | $ | 635 | 2 | % | ||||||||
Acquired Properties | 5,740 | 2,550 | 3,190 | 125 | % | |||||||||||
Expanded Properties | 508 | 414 | 94 | 23 | % | |||||||||||
Corporate Office | 233 | 502 | (269 | ) | (54 | %) | ||||||||||
Total | $ | 46,670 | $ | 43,020 | $ | 3,650 | 8 | % |
The increase in depreciation expense is mainly due to the newly acquired properties.
Interest Expense, excluding Amortization of Financing Costs | 2018 | 2017 | $ Change | % Change | ||||||||||||||||||||||||||||
Interest Expense, excluding Amortization of Financing Costs ($ in thousands) | 2020 | 2019 | $ Change | % Change | ||||||||||||||||||||||||||||
Same Properties | $ | 16,344,050 | $ | 19,032,723 | $ | (2,688,673 | ) | (14 | %) | $ | 25,313 | $ | 27,569 | ($ | 2,256 | ) | (8 | %) | ||||||||||||||
Acquired Properties | 9,368,794 | 2,156,392 | 7,212,402 | 334 | % | 6,019 | 2,583 | 3,436 | 133 | % | ||||||||||||||||||||||
Expanded Properties | 509,024 | 588,191 | (79,167 | ) | (13 | %) | 501 | 262 | 239 | 91 | % | |||||||||||||||||||||
Sold Properties | 38,272 | 143,510 | (105,238 | ) | (73 | %) | ||||||||||||||||||||||||||
Loans Payable | 4,868,582 | 2,599,046 | 2,269,536 | 87 | % | 3,130 | 5,245 | (2,115 | ) | (40 | %) | |||||||||||||||||||||
Total | $ | 31,128,722 | $ | 24,519,862 | $ | 6,608,860 | 27 | % | $ | 34,963 | $ | 35,659 | $ | (696 | ) | (2 | %) |
The increasedecrease in interest expense iswas mainly due to the decrease in Same Properties and the decrease in Loans Payable which was partially offset with the increase in Acquired Properties due to the new loans obtained in connection with the acquisition of new properties. Interest expense for same properties decreasedThe decrease in Same Properties was mainly due to the reduction in the outstanding fixed rate mortgage balancebalances related to these properties. The outstanding fixed rate mortgage balancebalances related to these properties was reduced mainly due to the payoff of five fixed rate mortgage loans totaling approximately $12,487,000 and regularly scheduled principal amortization payments made during fiscal 2018.2020, including the repayment of two self-amortizing mortgage loans for our properties located in Augusta, GA and Huntsville, AL. These two loans were at a weighted average interest rate of 5.52%. In addition, the weighted average interest rate on our fixed rate debt decreased from 4.18%4.03% as of September 30, 20172019 to 4.07%3.98% as of September 30, 2018.
Acquisition Costs
Acquisition costs that were expensed2020. The decrease in the Consolidated Statement of Income decreased $178,526, or 100% during fiscal 2018 as compared to fiscal 2017. As a result of adopting ASU 2017-01, effective as of April 1, 2017, as permitted under the standard, we no longer accountinterest expense for our property acquisitions as business combinations and instead we account for our property acquisitions as acquisitions of assets. In an acquisition of assets, certain acquisition costs are capitalized to real estate investments as part of the purchase price as opposed to being expensed as Acquisition Costs under the accounting treatment for business combinations previously used. Therefore, as of April 1, 2017, we no longer expensed any Acquisition Costs.
General and Administrative Expenses
General and administrative expenses increased $967,033, or 12%, during fiscal 2018 as compared to fiscal 2017. The increase was primarily due to an increase in salaries and director fees which wereLoans Payable is due to a combination of increasesa $20.0 million decrease in wage rates and headcount of employeesthe outstanding Loan Payable balance from September 30, 2019 to September 30, 2020 and a combinationdecrease in the interest rate from 3.74% as of increasesSeptember 30, 2019 to 2.92% as of September 30, 2020.
General and Administrative Expenses
General and administrative expenses decreased $149,000, or 2%, during fiscal 2020 as compared to fiscal 2019. The decrease was primarily due to employee headcount reduction and a decrease in director fees and headcount of directors.travel expenses. General and administrative expenses, as a percentage of gross revenue, (which includes Rental Revenue, Reimbursement Revenue and Dividend and Interest Income), decreased by 8%6% to 5.8%5.0% for fiscal year 20182020 from 6.3%5.3% for fiscal year 2017.2019. General and administrative expenses, as a percentage of undepreciated assets (which is our total assets excluding accumulated depreciation), decreased by 4%7% to 4640 basis points from 4843 basis points for the fiscal years 20182020 and 2017,2019, respectively.
Non-recurring Severance Expense
On December 23, 2019, our former General Counsel, announced her retirement effective December 31, 2019. In connection with her severance package, during the first quarter of fiscal 2020, we incurred a one-time, Non-recurring Severance Expense of $786,000.
Dividend and Interest Income
Many REITs reduced their dividends in 2020 due to the COVID-19 Pandemic. Dividend and Interest Income increased $6,189,901,decreased $4.7 million, or 89%31%, during fiscal 20182020 as compared to fiscal 2017.2019. This decrease is mainlydue to reduced dividends from our REIT securities portfolio. The REIT securities portfolio’s weighted average yield was approximately 6.4% during fiscal 2020 as compared to 8.5% for fiscal 2019. We held $108.8 million in marketable REIT securities as of September 30, 2020, representing 4.9% of our undepreciated assets.
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Preferred Dividend Expense
Preferred Dividend Expense increased $7.7 million, or 41%, during fiscal 2020 as compared to fiscal 2019. This increase is due to the higher average carrying value5.0 million shares we sold of our 6.125% Series C Preferred Stock under the REIT securities portfolioPreferred Stock ATM Program during the fiscal year ended September 30, 2018 as compared to during the fiscal year ended September 30, 2017. In addition, the REIT securities portfolio earned2020 at a higher weighted average yieldprice of approximately 9.5% during fiscal 2018 as compared to 7.7% for fiscal 2017.
Realized Gain on Sales of Securities Transactions, net
Realized gain on sales of securities transactions, net consisted of the following:
2018 | 2017 | |||||||
Gross realized gains | $ | 112,272 | $ | 2,320,561 | ||||
Gross realized losses | (885 | ) | (8,847 | ) | ||||
Total Realized Gain on Sales of Securities Transactions, net | $ | 111,387 | $ | 2,311,714 |
We had an accumulated net unrealized loss on our securities portfolio of $24,744,579 as of September 30, 2018.
Comparison of Year Ended September 30, 2017 to Year Ended September 30, 2016
The following tables summarize our rental revenue, reimbursement revenue, real estate taxes, operating expenses, and depreciation expense by category. For the purposes of the following discussion, same properties are properties owned as of October 1, 2015 that have not been subsequently expanded or sold.
Acquired Properties are properties that were acquired subsequent to September 30, 2015. Eighteen properties were acquired during fiscal 2017 and fiscal 2016. Acquired properties include the properties located in Concord (Charlotte), NC; Covington (New Orleans), LA; Imperial (Pittsburgh), PA; Burlington (Seattle/Everett), WA; Colorado Springs, CO; Louisville, KY; Davenport (Orlando), FL and Olathe (Kansas City), KS (all acquired in fiscal 2016) and Hamburg (Buffalo), NY; Ft. Myers, FL; Walker (Grand Rapids), MI; Mesquite (Dallas), TX; Aiken (Augusta, GA), SC; Homestead (Miami), FL; Oklahoma City, OK; Concord (Charlotte), NC; Kenton, OH and Stow, OH (all acquired in fiscal 2017).
During fiscal 2017 and 2016, there were five property expansions completed at the properties located in Olive Branch (Memphis, TN), MS; Huntsville, AL; Tampa, FL (FedEx Ground); Edinburg, TX and Ft. Myers, FL. Expanded Properties include these properties that were expanded subsequent to September 30, 2015, with the exception of the property located in Ft. Myers, FL. Since this property was acquired in fiscal 2017 and subsequently expanded, it is therefore included in Acquired Properties instead of being included in Expanded Properties.
Sold property consists of one property located in White Bear Lake (Minneapolis/St. Paul), MN that was sold on October 27, 2016.
As of September 30, 2017 and 2016, the occupancy rates of our total property portfolio were 99.3% and 99.6%, respectively. Subsequent to fiscal yearend, on November 1, 2017, we leased our previously vacant 36,270 square foot facility located in Urbandale (Des Moines), IA for 10.2 years which increased our current occupancy rate to 99.5%.
Rental Revenues | 2017 | 2016 | $ Change | % Change | ||||||||||||
Same Properties | $ | 70,047,915 | $ | 70,082,404 | $ | (34,489 | ) | (0 | %) | |||||||
Acquired Properties | 21,360,523 | 6,573,225 | 14,787,298 | 225 | % | |||||||||||
Expanded Properties | 6,251,340 | 4,936,800 | 1,314,540 | 27 | % | |||||||||||
Sold Property | -0- | -0- | -0- | 0 | % | |||||||||||
Total | $ | 97,659,778 | $ | 81,592,429 | $ | 16,067,349 | 20 | % |
The increase in rental revenues is mainly due to the increase from the newly acquired properties and expanded properties.
Reimbursement Revenues | 2017 | 2016 | $ Change | % Change | ||||||||||||
Same Properties | $ | 15,204,496 | $ | 14,343,308 | $ | 861,188 | 6 | % | ||||||||
Acquired Properties | 2,476,183 | 862,919 | 1,613,264 | 187 | % | |||||||||||
Expanded Properties | 1,017,657 | 956,777 | 60,880 | 6 | % | |||||||||||
Sold Property | 27,191 | -0- | 27,191 | -0- | ||||||||||||
Total | $ | 18,725,527 | $ | 16,163,004 | $ | 2,562,523 | 16 | % |
Our single tenant properties are subject to net leases, which require the tenants to absorb the real estate taxes, insurance and the majority of the repairs and maintenance. As such, we are reimbursed by the tenants for these expenses. Therefore, the increase in reimbursement revenues is offset by the increase in Real Estate Taxes and the increase in Operating Expenses, which includes insurance, repairs and maintenance and other operating expenses. In addition, the increase in reimbursement revenues is mainly due to the increase from the newly acquired properties.
Real Estate Taxes | 2017 | 2016 | $ Change | % Change | ||||||||||||
Same Properties | $ | 12,493,623 | $ | 11,713,809 | $ | 779,814 | 7 | % | ||||||||
Acquired Properties | 2,090,454 | 804,831 | 1,285,623 | 160 | % | |||||||||||
Expanded Properties | 673,702 | 660,994 | 12,708 | 2 | % | |||||||||||
Sold Property | 8,855 | 115,090 | (106,235 | ) | (92 | %) | ||||||||||
Total | $ | 15,266,634 | $ | 13,294,724 | $ | 1,971,910 | 15 | % |
The increase in real estate taxes is mainly due to the newly acquired properties. The increase from same properties is mainly due to an increase in assessment values.
Operating Expenses | 2017 | 2016 | $ Change | % Change | ||||||||||||
Same Properties | $ | 3,900,093 | $ | 3,795,817 | $ | 104,276 | 3 | % | ||||||||
Acquired Properties | 506,964 | 92,184 | 414,780 | 450 | % | |||||||||||
Expanded Properties | 348,491 | 343,029 | 5,462 | 2 | % | |||||||||||
Sold Property | 132,374 | 42,869 | 89,505 | 209 | % | |||||||||||
Total | $ | 4,887,922 | $ | 4,273,899 | $ | 614,023 | 14 | % |
The increase in operating expenses is mainly due to the newly acquired properties.
Net Operating Income (NOI)* | 2017 | 2016 | $ Change | % Change | ||||||||||||
Same Properties | $ | 68,858,695 | $ | 68,916,086 | $ | (57,391 | ) | (0 | %) | |||||||
Acquired Properties | 21,239,288 | 6,539,129 | 14,700,159 | 225 | % | |||||||||||
Expanded Properties | 6,246,804 | 4,889,554 | 1,357,250 | 28 | % | |||||||||||
Sold Property | (114,038 | ) | (157,959 | ) | 43,921 | 28 | % | |||||||||
Total | $ | 96,230,749 | $ | 80,186,810 | $ | 16,043,939 | 20 | % |
The increase in NOI is mainly due to the newly acquired properties and expanded properties.
* The revenue and expense items related to property operations discussed above are components of NOI which are recurring Rental and Reimbursement Revenue, less Real Estate Taxes and Operating Expenses. NOI is a non-GAAP performance measure. See “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operation – Overview” for a reconciliation of our Net Operating Income to our Net Income Attributable to Common Shareholders.
Depreciation | 2017 | 2016 | $ Change | % Change | ||||||||||||
Same Properties | $ | 20,846,253 | $ | 20,554,181 | $ | 292,072 | 1 | % | ||||||||
Acquired Properties | 7,076,142 | 2,078,557 | 4,997,585 | 240 | % | |||||||||||
Expanded Properties | 1,704,597 | 1,326,210 | 378,387 | 29 | % | |||||||||||
Sold Property | 8,006 | 96,074 | (88,068 | ) | (92 | %) | ||||||||||
Total | $ | 29,634,998 | $ | 24,055,022 | $ | 5,579,976 | 23 | % |
The increase in depreciation expense is mainly due to the newly acquired and expanded properties.
Interest Expense, excluding Amortization of Financing Costs | 2017 | 2016 | $ Change | % Change | ||||||||||||
Same Properties | $ | 13,264,189 | $ | 16,408,865 | $ | (3,144,676 | ) | (19 | %) | |||||||
Acquired Properties | 7,406,520 | 1,805,226 | 5,601,294 | 310 | % | |||||||||||
Expanded Properties | 1,250,107 | 991,826 | 258,281 | 26 | % | |||||||||||
Sold Property | -0- | -0- | -0- | 0 | % | |||||||||||
Loans Payable | 2,599,046 | 2,630,894 | (31,848 | ) | (1 | %) | ||||||||||
Total | $ | 24,519,862 | $ | 21,836,811 | $ | 2,683,051 | 12 | % |
The increase in interest expense is mainly due to the acquisition of new properties. Interest expense for same properties decreased mainly due to the reduction in the outstanding fixed rate mortgage balance related to these properties. The outstanding fixed rate mortgage balance related to these properties was reduced mainly due to the payoff of 16 fixed rate mortgage loans totaling approximately $40,037,000 and regularly scheduled principal amortization payments made during fiscal 2017. In addition, the weighted average interest rate on our fixed rate debt decreased from 4.48% as of September 30, 2016 to 4.18% as of September 30, 2017.
Acquisition Costs
Acquisition costs that were expensed in the Consolidated Statement of Income decreased $551,915, or 76% during fiscal 2017 as compared to fiscal 2016. As a result of adopting ASU 2017-01, effective as of April 1, 2017, as permitted under the standard, we no longer account for our property acquisitions as business combinations and instead we account for our property acquisitions as acquisitions of assets. In an acquisition of assets, certain acquisition costs are capitalized to real estate investments as part of the purchase price as opposed to being expensed as Acquisition Costs under the accounting treatment for business combinations previously used. Therefore, as of April 1, 2017, we no longer are required to expense our Acquisition Costs. Two properties totaling approximately $56,102,000 were acquired during the first half of fiscal 2017, prior to April 1, 2017 and eight properties totaling approximately $210,747,000 were acquired during fiscal 2016.
General and Administrative Expenses
General and administrative expenses decreased $126,578, or 2%, during fiscal 2017 as compared to fiscal 2016. The decrease in fiscal 2017 was partially due to a one-time $400,000 cash signing bonus granted to the President and Chief Executive Officer in accordance with his amended employment agreement during fiscal 2016 and due to a one-time $100,000 severance payment made to a former employee during fiscal 2016. Additionally, during fiscal 2016, the Founder and Chairman of the Board was granted a discretionary award of 40,000 shares of restricted stock which vest in equal annual installments over the next five years and has a grant date fair value of $13.64$25.04 per share for a total grant date fair valuewhich generated net proceeds, after offering expenses, of $545,600. Since the Founder and Chairman of the Board is of retirement age, the entire fair value of the grant was fully expensed on the grant date during fiscal 2016. These one-time fiscal 2016 expenses were partially offset by increases in all employees’ wage rates and professional fees incurred during fiscal 2017. General and administrative expenses, as a percentage of gross revenue, (which includes Rental Revenue, Reimbursement Revenue and Dividend and Interest Income), decreased by 18% to 6.3% for fiscal year 2017 from 7.7% for fiscal year 2016. General and administrative expenses, as a percentage of undepreciated assets (which is our total assets excluding accumulated depreciation), decreased by 17% to 48 basis points from 58 basis points for the fiscal years 2017 and 2016, respectively.$122.4 million.
Dividend and Interest Income
Dividend and Interest Income increased $1,314,172, or 23%, during fiscal 2017 as compared to fiscal 2016. This is mainly due to the higher average carrying value of the REIT securities portfolio during the fiscal year ended September 30, 2017 as compared to during the fiscal year ended September 30, 2016. The REIT securities portfolio weighted average yield for fiscal 2017 was approximately 7.7% as compared to 8.0% for fiscal 2016.
Realized Gain on Sales of Securities Transactions, net
Realized gain on sales of securities transactions, net consisted of the following:
2017 | 2016 | |||||||
Gross realized gains | $ | 2,320,561 | $ | 4,403,724 | ||||
Gross realized losses | (8,847 | ) | (5,125 | ) | ||||
Total Realized Gain on Sales of Securities Transactions, net | $ | 2,311,714 | $ | 4,398,599 |
We had an accumulated net unrealized gain on our securities portfolio of $6,570,565 as of September 30, 2017.
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements.
Contractual Obligations
The following is a summary of our contractual obligations as of September 30, 2018:
Contractual Obligations | Total | Less than one year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Mortgage Notes Payable | $ | 719,768,355 | $ | 60,151,223 | $ | 98,703,799 | $ | 122,553,702 | $ | 438,359,631 | ||||||||||
Interest on Mortgage Notes Payable | 196,867,159 | 28,039,774 | 49,122,612 | 39,168,341 | 80,536,432 | |||||||||||||||
Loans Payable (1) | 186,608,676 | 76,608,676 | 110,000,000 | -0- | -0- | |||||||||||||||
Interest on Loans Payable | 8,650,600 | 4,360,600 | 4,290,000 | -0- | -0- | |||||||||||||||
Purchase of Properties | 153,995,275 | 113,081,132 | 40,914,143 | -0- | -0- | |||||||||||||||
Expansions of Existing Properties | 6,855,608 | 6,855,608 | -0- | -0- | -0- | |||||||||||||||
Operating Lease Obligation | 439,788 | 134,446 | 271,376 | 33,966 | -0- | |||||||||||||||
Retirement Benefits | 600,000 | 50,000 | 50,000 | -0- | 500,000 | |||||||||||||||
Total | $ | 1,273,785,461 | $ | 289,281,459 | $ | 303,351,930 | $ | 161,756,009 | $ | 519,396,063 |
Mortgage notes payable represents the principal amounts outstanding by scheduled maturity as of September 30, 2018. Interest is payable on these mortgages at fixed rates ranging from 3.45% to 7.60%, with a weighted average interest rate of 4.07%. As of September 30, 2018, the weighted average loan maturity of the mortgage notes payable is 11.7 years. This compares to a weighted average interest rate of 4.18% as of September 30, 2017 and a weighted average loan maturity of the mortgage notes payable of 11.6 years as of September 30, 2017. The Mortgage Notes Payable in the above table does not include one 15 year, fully-amortizing mortgage loan of $55,000,000 at a fixed interest rate of 4.13%, which was obtained subsequent to the 2018 fiscal yearend in connection with the purchase of one property for $85,248,352. The cost of these acquisitions, purchased subsequent to yearend, is included in the Purchase of Properties in the above table.
As of September 30, 2018, Loans Payable represented the amount drawn down on our $200,000,000 unsecured line of credit facility (the “Facility”) in the amount of $160,000,000 and the amount drawn down on our margin line of credit from our marketable securities in the amount of $26,608,676. The Facility matures in September 2020 with a one-year extension at our option (subject to various conditions as specified in the loan agreement). During the fiscal year ended September 30, 2018, we had net draws of $50,000,000 under the Facility. Availability under the Facility is limited to 60% of the value of the borrowing base properties. The value of the borrowing base properties is determined by applying a capitalization rate to the NOI generated by our unencumbered, wholly-owned industrial properties. Effective, March 22, 2018, the capitalization rate applied to our NOI generated by our unencumbered, wholly-owned industrial properties was lowered from 7.0% to 6.5%, thus increasing the value of the borrowing base properties under the terms of the agreement. Borrowings under the Facility, will, at our election, either i) bear interest at LIBOR plus 140 basis points to 220 basis points, depending on our leverage ratio, or ii) bear interest at BMO’s prime lending rate plus 40 basis points to 120 basis points, depending on our leverage ratio. Our borrowings as of September 30, 2018, based on our leverage ratio as of September 30, 2018, bear interest at LIBOR plus 170 basis points, which was at an interest rate of 3.90% as of September 30, 2018. In addition, we have a $100,000,000 accordion feature, bringing the total potential availability under the Facility (subject to various conditions as specified in the loan agreement) up to $300,000,000. Subsequent to fiscal yearend, on October 9, 2018, we paid down $50,000,000 on the Facility which reduced our amount outstanding under the Facility to $110,000,000.
We also invest in equity marketable securities of other REITs, which provides us with additional diversification, liquidity, and income, and serves as a proxy for real estate when more favorable risk adjusted returns are not available. From time to time, we may purchase these securities on margin when the interest and dividend yields exceed the cost of funds. In general, we may borrow up to 50% of the value of the marketable securities, which was $154,920,545 as of September 30, 2018. As of September 30, 2018, we had borrowings of $26,608,676 under our margin line, bearing interest at 2.75%. Subsequent to fiscal yearend, on October 9, 2018, we paid off the margin loan.
The contractual obligation for the Interest on Loans Payable amount is determined using an interest rate of 3.90% on the amount drawn down on the Facility of $160,000,000 through October 9, 2018 and $110,000,000 thereafter and is determined using an interest rate of 2.75% for interest on the amount drawn down on the margin loan through the date it was paid off on October 9, 2018.
Purchase of properties represents commitments we had entered into as of September 30, 2018 to purchase three industrial properties totaling approximately 745,000 square feet. One of the three properties, amounting to approximately $85,248,000 and totaling approximately 347,000 square feet, was acquired subsequent to our fiscal yearend. We expect to close on the two remaining properties, amounting to approximately $68,747,000 and approximately 398,000 square feet, during fiscal 2019 and 2020, subject to satisfactory completion of due diligence and other customary closing conditions and requirements.
Expansions of existing properties represent the remaining costs expected to be incurred as of September 30, 2018 in connection with a parking lot expansion for a property leased to FedEx Ground Package System, Inc. located in Ft. Mill, SC and for a 154,800 square foot building expansion for a property lease to UGN, Inc. located in Monroe, OH. The expansion at the property located in Ft. Mill, SC was substantially completed on September 27, 2018 for a cost of approximately $1,834,000, resulting in a new 10 year lease which extended the prior lease expiration date from October 2023 to August 2028. In addition, the expansion resulted in an increase in annual rent effective from the date of completion of approximately $183,000 from approximately $1,415,000, or $8.00 per square foot to approximately $1,598,000, or $9.03 per square foot. The expansion at the property located in Monroe, OH is expected to be completed in fiscal year 2019 for a total project cost of approximately $9,072,000, which will result in a new 15 year lease which will extend the prior lease expiration date from February 2030 to January 2034. In addition, the expansion will result in an increase in annual rent effective from the date of completion by approximately $862,000 from approximately $961,000, or $4.14 per square foot, to approximately $1,823,000, or $4.71 per square foot. In addition, the annual rent will increase 2% per annum.
Operating lease obligation represents the lease for our current 5,680 square foot corporate office located in Freehold, NJ which is leased through December 2021.
Retirement Benefits of $600,000 represent the total future amount to be paid, on an undiscounted basis, relating to one executive officer, Mr. Eugene W. Landy, the Founder and Chairman of the Board. These benefits are based upon a specific employment agreement. The agreement does not require us to separately fund the obligation and therefore these amounts will be paid from our general assets. We have accrued these benefits on a present value basis over the term of the employment agreement.
Liquidity and Capital Resources
We operate as a REIT deriving our income primarily from real estate rental operations. Our shareholders’ equity increased $57.1 million from $712,865,696$1.04 billion as of September 30, 20172020 to $797,905,767$1.09 billion as of September 30, 2018,2021. Our shareholders’ equity increased due to Net Income Attributable to Common Shareholders of $44.8 million, the issuance of 5,816,44388,000 shares of common stock in the amountfor total proceeds of $90,028,789$1.4 million through the DRIP, stock compensation expense of $433,895,$287,000, exercise of stock options consisting of 40,000189,000 shares for total proceeds of $569,600, Net Income Attributable to common shareholders of $38,815,344$2.4 million and the issuance of 1,648,5563.1 million shares of our 6.125% Series C Cumulative Redeemable Preferred Stock issued in connection with the Preferred Stock ATM Program for total proceeds, net of offering costs, in the amount of approximately $40,094,000. The$76.0 million and a net decrease in unrealized loss on change in fair value of our interest rate swap agreement of $2.1 million. These increases were partially offset by payments of cash distributions paid to common shareholders of $53,586,063 and the net decrease in unrealized gains/loss on investments of $31,315,144. See further discussion below.$69.8 million.
Our ability to generate cash adequate to meet our needs is dependent primarily on income from our real estate investments, andas well as our securities portfolio, the sale of real estate investments and securities, refinancing of mortgage debt, leveraging of real estate investments, availability of bank borrowings, proceeds from the DRIP, proceeds from the Preferred Stock ATM Program, proceeds from public offerings and private placements of additional common or preferred stock or other securities, and access to the capital markets. Purchases of new properties, payments of expenses related to real estate operations, capital improvement programs, debt service, general and administrative expenses, and distribution requirements place demands on our liquidity.
We intend to operate our properties from the cash flows generated by our properties. However, our expenses are affected by various factors, including inflation. Increases in operating expenses are predominantly borne by the tenant. To the extent that these increases cannot be passed on through rent reimbursements, these increases will reduce the amount of available cash flow which can adversely affect the market value of the property.
As of September 30, 2018, we had $9,324,585 in Cash and Cash Equivalents and $154,920,545 in marketable securities. In addition, as of September 30, 2018, we had $40,000,000 available under our Facility. The Facility provides for up to $200,000,000 in available borrowings with a $100,000,000 accordion feature, bringing the total potential availability up to $300,000,000, subject to certain conditions. Subsequent to fiscal yearend, on October 9, 2018, we paid down $50,000,000 on the Facility, which reduced our amount outstanding to $110,000,000.
We have been raising equity capital throughused a variety of sources to fund our DRIP, Preferred Stock ATM Program, registered direct placements, the public sale of common and preferred stock and throughcash needs in addition to our free cash flow generated from our investments in net-leased industrial properties. In the past, we considered selling marketable securities from our investment portfolio, borrowing on our unsecured line of credit facility or securities margin loans, finance or refinance debt, or raising capital through registered direct placements, and public offerings of common and preferred stock. We believe thatthese sources of funds generated from operations, the DRIP, the Preferred Stock ATM Program and bank borrowings, together with the ability to finance and refinance our properties, will provide sufficient funds to adequately meet our obligations over the next few years.
Subsequent to fiscal yearend, in October 2018, we completed a public offering of 9,200,000 shares of our Common Stock (including the underwriters’ option to purchase 1,200,000 additional shares) at a price of $15.00 per share, before underwriting discounts. We received net proceeds from the offering, after deducting underwriting discounts and all other transaction costs, of approximately $132,339,000.
As of September 30, 2018,2021, we owned 111122 properties, of which 6160 are subject to fixed rate mortgages. On August 27, 2015, we obtained an unsecured revolving lineWe have a New Facility consisting of credit (the “Facility”). The Facility is syndicated with three banks led by BMO, as sole lead arrangera $225.0 million Revolver and sole book runner, Bank of Montreal as administrative agent, and includes JPMorgan Chase Bank, N.A. (J.P. Morgan) and RBC Capital Markets (RBC) as co-syndication agents. The Facility provided for up to $130,000,000a $75.0 million Term Loan, resulting in available borrowings with a $70,000,000 accordion feature, bringing the total potential availability up to $200,000,000, subject to certain conditions. The Facility was set to mature in August 2019under both the Revolver and had a one-year extension option, at our option. On September 30, 2016, we entered intothe Term Loan of $300.0 million. In addition, the Revolver includes an amendment to the Facility (the Amendment), pursuant to which we exercised the $70,000,000 accordion feature under the Facility, bringing the maximum availability under the Facility to $200,000,000, and amended the Facility to provide an additional $100,000,000 accordion feature, bringingthat will allow the total potential availability upunder the New Facility to $300,000,000, subjectfurther increase to certain conditions, including, without limitation, obtaining commitments from additional lenders. In addition, the Amendment extended the maturity date of the Facility from August 27, 2019 to September 30, 2020, with a one-year extension option, at our option, subject to$400.0 million, under certain conditions. Availability under the New Facility is limited to 60% of the value of the borrowing base properties. The valueAs of the borrowing base properties is determined by applying a capitalization rate to the NOI generated by our unencumbered, wholly-owned industrial properties. Effective, March 22, 2018, the capitalization rate applied to our NOI generated by our unencumbered, wholly-owned industrial properties was lowered from 7.0% to 6.5%, thus increasing the value of the borrowing base propertiesSeptember 30, 2021, we have $175.0 million drawn down under the terms of the agreement. BorrowingsRevolver and we have $75.0 million outstanding under the Facility, will, at our election, either i) bear interest at LIBOR plus 140 basis points to 220 basis points, depending on our leverage ratio, or ii) bear interest at BMO’s prime lending rate plus 40 basis points to 120 basis points, depending on our leverage ratio. Our borrowingsTerm Loan. In addition, as of September 30, 2018, based on our leverage ratio as of September 30, 2018, bear interest at LIBOR plus 170 basis points, which was at an interest rate of 3.90% as of September 30, 2018. As of September 30, 2018, $160,000,000 was drawn down under the Facility. Subsequent to fiscal yearend, on October 9, 2018,2021, we paid down $50,000,000 on the Facility which reduced our amount outstanding to $110,000,000.had $48.6 million in Cash and Cash Equivalents and $143.5 million in marketable securities.
We also may use margin loans from time to time for purchasing securities, for temporary funding of acquisitions, and for working capital purposes. At September 30, 2021 and 2020, there were no amounts drawn down under the margin loan. The interest rate charged on the margin loans is the bank’s margin rate and was 2.75% and 2.05% as of September 30, 2018 and 2017, respectively.is 0.75%. The margin loans are due on demand and are collateralized by our securities portfolio. We must maintain a coverage ratio of approximately 50%. At September 30, 2018 and 2017, there was $26,608,676 and $10,091,417 outstanding under the margin loans, respectively. Subsequent to fiscal yearend, on October 9, 2018, we paid off the margin loan.
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Our focus is on real estate investments. We have historically financed purchases of real estate primarily through long-term, fixed rate, amortizing mortgages.
During fiscal 2018,2021, we purchased sevenfour industrial properties totaling approximately 2,655,0001.6 million square feet situated on 316.2 acres resulting in a very expansive land to building ratio of 8.8 to 1. All four properties are leased to investment-grade tenants or their subsidiaries, with net-leased terms ranging from 1015 to 1520 years, resulting in a weighted average lease maturity of 11.417.1 years. Approximately 2,255,000Three of the four properties, consisting of 903,000 square feet, or 85%58% of the total square footage of the four properties, purchased, are leased to investment-grade tenants or their subsidiaries, of which, approximately 761,000 square feet, or 29%, is leased to FedEx Corporation (FDX) or FedEx Ground Package System, Inc., a subsidiary of FDX.FedEx Corporation (FDX). The aggregate purchase price for the sevenfour properties was approximately $282,332,000.$258.4 million. These four properties are located in Alabama, Florida, Georgia, Oklahomathe following Metropolitan Statistical Areas (MSAs): Columbus, OH, Atlanta, GA, Burlington, VT and South Carolina.Knoxville, TN. These sevenfour properties are expected to generate annualized rental income over the life of their leases of approximately $17,414,000.$15.2 million. In connection with two of the sevenfour properties acquired during the 20182021 fiscal year, we entered into fourone 17 year, fully-amortizing mortgage loan and one 15 year, fully-amortizing mortgage loan. In connection with the remaining two properties acquired during the 2021 fiscal year, we entered into commitments for two, 15 year, fully-amortizing mortgage loans, two 14 yearwhich have not yet closed. These four fully-amortizing mortgage loans and one 10 year loan amortizing over 18have a weighted average term of 15.7 years. The sevenprincipal amount of the four mortgage loans originally totaled $175,160,000$161.8 million with an original weighted average mortgage loan maturity of 14.1 years andfixed interest rates ranging from 2.50% to 3.25%, resulting in a weighted average fixed interest rate of 3.91%2.89%.
Subsequent to fiscal yearend, on October 19, 2018,27, 2021, we purchased a newly constructed 347,145291,000 square foot industrial building, situated on 62.046.0 acres, located in Trenton, NJ.the Birmingham, AL MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through June 2032.July 2036. The purchase price was $85,248,352.$30.2 million. We obtained a mortgage loan commitment for a 15 year, fully-amortizing mortgage loan of $55,000,000$19.3 million at a fixed interest rate of 4.13%.2.40% which has not yet closed. Annual rental revenue over the remaining term of the lease averages approximately $5,328,000.$1.7 million.
The industrial property purchased thus far during fiscal 2019 increased our current total leasable square feet to approximately 21,521,000.
In addition to the $30.2 million property purchased subsequent to our fiscal yearend, as described above, we have entered into agreements to purchase twothree, new build-to-suit, industrial buildings that are currently being developed in Alabama, Georgia and North Carolina, consisting of approximately 398,000Texas, totaling 1.1 million square feet, withfeet. These future acquisitions have net-leased terms ranging from 10 to 15 years with a weighted average lease term of 13.412.6 years. The total purchase price for these three properties is approximately $68,747,000 and both$126.8 million. Two of these three properties, consisting of an aggregate of 563,000 square feet, or 52% of the total leasable area, are leased to FedEx Ground Package System, Inc. All three properties are leased to companies, or subsidiaries of companies, that are considered Investment Grade by S&P Global Ratings (www.standardandpoors.com) and by Moody’s (www.moodys.com). Subject to satisfactory due diligence and other customary closing conditions and requirements, we anticipate closing all three of these transactions during fiscal 2022.
We have several FedEx Ground parking expansion projects in progress with more under discussion. Currently there are nine parking expansion projects underway, which we expect to cost approximately $42.6 million. These parking expansion projects will enable us to capture additional rent while lengthening the first quarter of fiscal 2019 and fiscal 2020. In connection with oneterms of these properties, we have entered into a commitment to obtain a 15 year, fully-amortizing mortgage loan of $17,500,000 with a fixed interest rate of 4.40%.leases. We are also have entered into a commitmentin discussions to expand the parking at eight additional locations bringing the total recently completed and likely future parking lot expansion projects to 18 currently.
Due to the proliferation of ecommerce sales and last mile deliveries, it is important to take into account the large amounts of real estate utilized for trailer, van, and car parking at many of our property locatedproperties in Monroe, OH by 154,800 square feet, increasing the buildingdetermining how our in-place rental rates compare to 387,000 square feet. The expansion is expected to be completed in fiscal year 2019market rental rates for a total project cost of approximately $9,072,000, which will resultproperties being used in a new 15 year lease which will extend the prior lease expiration date from February 2030 to January 2034. In addition, the expansion will result in an increase in annual rent effective from the date of completion by approximately $862,000 from approximately $961,000, or $4.14similar manner. Rents per square foot on properties that may be nearby, but have only limited acreage devoted to approximately $1,823,000, or $4.71 per square foot. In addition,parking, are poor comparisons as they cannot accommodate the annual rent will increase 2% per annum. same tenant needs.
We may makehave additional acquisitions and expansions in fiscal 20192022 and fiscal 2020,2023, and the funds for these acquisitions and expansions may come from funds generated from operations, mortgages, draws on our unsecured line of credit facility, cash on hand, sale of marketable securities, other bank borrowings, proceeds from the Dividend Reinvestment and Stock Purchase Plan (DRIP), proceeds from the At-The-Market Preferred Equity Program (Preferred Stock ATM Program),DRIP and proceeds from private placements and public offerings of additional common or preferred stock or other securities. To the extent that funds or appropriate properties are not available, fewer acquisitions will be made.
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We also invest in marketable securities of other REITs as a proxy for real estate when more favorable risk adjusted returns are not available, for liquidity, and for additional income.REITs. We generally limit our marketable securities investmentsthe size of this portfolio to no more than approximately 10%5% of our undepreciated assets, (which is ourwhich we define as total assets excluding accumulated depreciation). From timedepreciation. Our REIT securities portfolio provides us with diversification, income, and is a source of potential liquidity when needed. We normally hold REIT securities long-term and have the ability and intent to time, we may purchasehold these securities on margin when there is an adequate yield spread.to recovery. During fiscal 2018,2021, our securities portfolio increased $31,155,775,$34.7 million, mainly due to purchases of $64,979,698 offset by the decreaseincrease in the net unrealized lossgain of $31,315,144 and the sale of securities with a cost of $2,508,779. We recognized gains on sales of securities of $111,387 in$50.2 million. In addition, to earning Dividend and Interest Income of $13,120,465 during fiscal 2018.2021, our securities portfolio earned dividend income of $6.2 million. In general, we may borrow up to 50% of the value of the marketable securities, which was $154,920,545$143.5 million as of September 30, 2018.2021. As of September 30, 2018,2021, we haddid not have any borrowings of $26,608,676 under our margin line, bearing interest at 2.75%. Subsequent to fiscal yearend, on October 9, 2018, we paid off the margin loan.line.
Cash flows provided by operating activities were $85,529,162, $73,867,866$84.8 million, $98.9 million and $54,699,500$100.7 million for fiscal years ended September 30, 2018, 20172021, 2020 and 2016,2019, respectively. The increasedecrease in cash flows provided from operating activities from fiscal 20172020 to fiscal 2018 and from fiscal 2016 to fiscal 20172021 is primarily due to the increasedNon-recurring Strategic Alternatives & Proxy Costs of $35.9 million offset from an increase in cash from income generated from acquisitions of propertiesproperties. The slight decrease in cash flows provided from operating activities from fiscal 2019 to fiscal 2020 is primarily due to a $4.0 million decrease in cash collected from tenant and expanded operations.other receivables due to the timing of billings and a $2.8 million increase in cash used for other assets and capitalized lease costs, mostly offset from an increase in cash from income generated from acquisitions of properties.
Cash flows used in investing activities were $332,513,200, $339,071,013$237.8 million, $180.7 million and $227,845,089$213.6 million for fiscal years ended September 30, 2018, 20172021, 2020 and 2016,2019, respectively. The increase in Cash flows used in investing activities infrom fiscal 2018 decreased2021 as compared to 20172020 was mainly due mainly to a decrease in the purchase of real estate and purchase of securities available for sale. This decrease was offset by an increase in Purchase of Real Estate & Intangible assets offset by proceeds from the saleSale of real estate from the four properties that were sold during fiscal 2018.Securities Available for Sale. The decrease in Cash flows used in investing activities infrom fiscal 2017 increased2020 as compared to 2016 due2019 was mainly to an increase in the purchase of real estate and purchasebecause we did not have any cash purchases of securities available for sale.sale during fiscal 2020, partially offset by an increase in purchase of real estate.
Cash flows provided by financing activities were $246,082,577, $179,679,685$178.1 million, $85.2 million and $256,821,188$123.7 million for fiscal years ended September 30, 2018, 20172021, 2020 and 2016,2019, respectively. Cash flows from financing activities increased in fiscal 20182021 as compared to 20172020 mainly due to netan increase in Net Draws on Loans Payable of $195.0 million offset by a reduction of $46.4 million decrease in proceeds of $66,517,259 from loans payable and net drawsreceived from the FacilityPreferred Stock ATM program, $18.5 million decrease in proceeds received from the DRIP program, $9.9 million increase in common dividends paid, $7.2 million increase in preferred dividends paid and an increase of $50,000,000.$15.9 million of principal payments in Fixed Rate Mortgage Notes Payable. Cash flows from financing activities decreased in fiscal 20172020 as compared to 20162019 mainly due mainly to the redemptionproceeds received from a common stock offering of 7.625% Series A Preferred Stock$132.3 million that was completed in fiscal 2019 and 7.875% Series B Preferred Stocka $38.3 million reduction in dividend reinvestments, partially offset by a $71.6 million reduction on the amount of $110,993,750repayments made towards our loans payable and the payoff of 16 mortgage notes payable in the amount of $40,037,099. This decrease was offset by ana $64.2 million increase in proceeds from mortgage loans in the amount of $35,380,515, the proceedsreceived from the issuance of 4,439,445 shares of the 6.125% Series C Preferred Stock with net proceeds of $106,736,978 and net draws from the Facility of $34,000,000.ATM program. In addition, we paid cash dividends (net of reinvestments), of $40,657,707, $36,163,355$68.7 million, $58.8 million and $33,665,037$46.9 million for fiscal 2018, 20172021, 2020 and 2016,2019, respectively.
As of September 30, 2018,2021, we had total assets of $1,718,377,886$2.2 billion and liabilities of $920,472,119.$1.1 billion. Our total debt to total market capitalization as of September 30, 20182021 and 20172020 was approximately 35%31% and 33%32%, respectively. Our net debt (net of cash and cash equivalents) to total market capitalization as of September 30, 20182021 and 20172020 was approximately 35%30% and 32%31%, respectively. Our net debt, less securities (net of cash and cash equivalents and net of securities) to total market capitalization as of September 30, 20182021 and 20172020 was approximately 29%26% and 26%27%, respectively. As of September 30, 2021, the weighted average loan maturity of our Mortgage Notes Payable was 10.9 years. We believe that we have the ability to meet our obligations and to generate funds for new investments.
We have a DRIP, in which participants can purchase our stock at a price of approximately 95% of market value. Amounts received in connection with the DRIP, (including dividend reinvestments of $12,928,356, $10,125,894$1.0 million, $7.6 million and $8,369,146$16.9 million for the fiscal years ended September 30, 2018, 20172021, 2020 and 2016,2019, respectively) were $90,028,789, $91,931,831$1.4 million, $26.4 million and $72,175,797$74.0 million for the fiscal years ended September 30, 2018, 20172021, 2020 and 2016,2019, respectively. In January 2021, when our Board of Directors unanimously decided to explore strategic alternatives to maximize shareholder value, the Board also determined to temporarily suspend our DRIP program during this process. Because the exploration of strategic alternative process is still ongoing, the DRIP program remains suspended.
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During fiscal 2018,2021, we paid total distributions to holders of our common stock of $53,586,063,$69.8 million, or $0.68$0.71 per common share. Of the dividends paid, $12,928,356$1.0 million was reinvested pursuant to the terms of the DRIP, representing a 24% participation rate.DRIP. On October 1, 2018,2021, our Board of Directors approved a cash dividend of $0.17$0.18 per share, to be paid on December 17, 2018,15, 2021, to common shareholders of record at the close of business on November 15, 2018,2021, which represents an annualized common dividend rate of $0.68$0.72 per share. We intend to pay these distributions from cash flows from operations.
On January 14, 2021, our Board of Directors approved a 5.9% increase in our quarterly common stock dividend, raising it to $0.18 per share from $0.17 per share. This represents an annualized dividend rate of $0.72 per share. This increase represents the third dividend increase in the past five years, representing a total increase of 20%. We have maintained or increased our common stock cash dividend for 2730 consecutive years. On October 1, 2015,We are one of the few REITs that maintained our Board of Directors approved an increase in our quarterly common stock cash dividend from $0.15 per share to $0.16 per share representing a 6.7% increase in our quarterly cash dividend. Then again, most recently, on October 2, 2017, our Board of Directors approved an increase in our quarterly common stock cash dividend and from $0.16 per share to $0.17 per share on October 2, 2017, representing a 6.3% increase in our quarterly cash dividend. These two dividend raises represent a total increase of 13%.throughout the Global Financial Crisis.
Our common stock dividend policy is dependent upon our earnings, capital requirements, financial condition, availability and cost of bank financing and other factors considered relevant by the Board of Directors. It is our intention to continue making comparable quarterly distributions in the future and to grow our distributions over time. We anticipate maintaining the annual dividend rate of $0.68 per common share although no assurances can be given since various economic factors may reduce the amount of cash flow available to us for common dividends. All decisions with respect to the payment of dividends are made by our Board of Directors, subject to limitations under our financing arrangements and Maryland law.
During fiscal 2018,2021, we paid $16,876,532$33.0 million in preferred stock dividends and accrued $313,924$396,000 of preferred stock dividends.
On September 13, 2016, we issued 5,400,000 shares of our 6.125% Series C Preferred Stock at an offering price of $25.00 per share in an underwritten public offering. We received net proceeds from the offering, after deducting the underwriting discount and other estimated offering expenses, of approximately $130,543,000. On October 14, 2016, we used $53,493,750 of the net proceeds from the offering to redeem all of the 2,139,750 issued and outstanding shares of our 7.625% Series A Preferred Stock. In addition, we used $498,540 of such net proceeds from the offering to pay all dividends, accrued and unpaid, up to and including the redemption date of the 7.625% Series A Preferred Stock.
On March 9, 2017, we issued an additional 3,000,000 shares of our 6.125% Series C Preferred Stock, liquidation preference of $25.00 per share, at a public offering price of $24.50 per share, for gross proceeds of $73,500,000, before deducting the underwriting discount and offering expenses. Net proceeds from the offering, after deducting underwriting discounts and other offering expenses, were approximately $71,003,000. On June 7, 2017, we used $57,500,000 of the net proceeds from the offering to redeem all of our 2,300,000 issued and outstanding shares of our 7.875% Series B Preferred Stock. In addition, we used $75,469 of such net proceeds from the offering to pay all dividends, accrued and unpaid, up to and not including the redemption date of the 7.875% Series B Preferred Stock.
On June 29, 2017,November 25, 2020, we entered into a Preferred Stock At-The-Market Sales Agreement Program with B. Riley FBR, Inc., or B. Riley (formerly FBR Capital Markets & Co.), that provided for the offer and sale of shares of our 6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 par value per share, with a liquidation preference of $25.00 per share, or our 6.125% Series C preferred stock, having an aggregate sales price of up to $100,000,000. On August 2, 2018, we replaced this program with a new Preferred Stock At-The-Market Sales Agreement Program (Preferred Stock ATM Program) with B. Riley that providesFBR., or B. Riley, providing for the offer and sale from time to time of $125,000,000up to $150.0 million of our 6.125% Series C preferred stock.Preferred Stock, which replaced a previous Preferred Stock ATM Program entered into on December 4, 2019 (which itself had replaced an earlier Preferred Stock ATM Program).
Sales of shares of our 6.125% Series C Preferred Stock under our Preferred Stock ATM Program are in “at the market offerings” as defined in Rule 415 under the Securities Act, including, without limitation, sales made directly on or through the NYSE, or on any other existing trading market for the 6.125% Series C Preferred Stock, or to or through a market maker, or any other method permitted by law, including, without limitation, negotiated transactions and block trades. We began selling shares through the first of these programs on July 3, 2017. Since inception through September 30, 2018,2021, we sold 3,088,00113.6 million shares of our 6.125% Series C Preferred Stock under these programs at a weighted average price of $25.06$24.91 per share, and generated net proceeds, after offering expenses, of approximately $75,828,000,$332.4 million, of which 1,648,5563.1 million shares were sold during the 2021 fiscal year ended 2018 at a weighted average price of $24.84$24.88 per share, and generatedgenerating net proceeds after offering expenses of approximately $40,094,000. As of September 30, 2018, there is approximately $119,096,000 remaining that may be$76.0 million. No shares were sold underpursuant to the Preferred Stock ATM Program.
As of September 30, 2018, 11,488,001 shares of the 6.125% Series CProgram since December 31, 2020. Our Preferred Stock were issued and outstanding.ATM Program has since expired.
Subsequent to fiscal yearend, in October 2018, we completed a public offering of 9,200,000 shares of our Common Stock (including the underwriters’ option to purchase 1,200,000 additional shares) at a price of $15.00 per share, before underwriting discounts. We received net proceeds from the offering, after deducting underwriting discounts and all other transaction costs, of approximately $132,339,000.
We are required to pay cumulative dividends on our 6.125% Series C Preferred Stock in the amount of $1.53125 per share per year, which is equivalent to 6.125% of the $25.00 liquidation value per share. As of September 30, 2018,2021, we have a total of 11,488,00122.0 million shares of 6.125% Series C Preferred Stock outstanding, representing an aggregate liquidation preference of $287,200,025.$549.6 million.
During fiscal 2020, the Company entered in a Common Stock ATM Program. To date, we have not raised any equity though our Common Stock ATM Program and it has since expired.
During the year ended September 30, 2018,2021, stock options to purchase 40,000189,000 shares were exercised at ana weighted average exercise price of $14.24$12.57 per share for total proceeds of $569,600.$2.4 million.
On an ongoing basis, we fund capital expenditures, primarily to maintain our properties. These expenditures may also include expansions as requested by tenants, or various tenant improvements on properties which are re-tenanted. The amounts of these expenditures can vary from year to year depending on the age of the properties, tenant negotiations, market conditions and lease turnover. Our 111122 properties, totaling approximately 21,174,00024.9 million square feet, have a weighted average building age, based on the square footage of our buildings, of 8.710.2 years.
During the three fiscal years ended September 30, 2018, 20172021, 2020 and 2016,2019, we completed a total of seventhree property expansions, consisting of threeone building expansionsexpansion and fourtwo parking lot expansions. Three of the four parking lot expansions included the purchase of additional land. The three building expansionsexpansion resulted in approximately 312,000155,000 additional square feet. Total costs for all seventhree property expansions were approximately $22,189,000$12.9 million and resulted in total increased annual rent of approximately $2,090,000. Six$1.2 million. One of these completed expansions resulted in new ten yearten-year lease extensions for the expanded properties and one completed expansion resulted in a new twelve yearfifteen-year lease extension. The weighted average lease extension for these seventhree property expansions is 10.912.7 years.
Recent Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, “Leases”. ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. ASU 2016-02 will become effective for annual reporting periods beginning after December 15, 2018. The most significant changes related to lessor accounting under ASU 2016-02 include bifurcating revenue into lease and non-lease components and the new standard’s narrow definition of initial direct costs for leases. Since our revenue is primarily derived from leasing activities from long-term net leases and since we currently do not capitalize indirect costs for leases, we believe that will continue to account for our leases and related leasing costs in substantially the same manner as we currently do once the adoption of the ASU 2016-02 becomes effective.
In July 2018, the FASB issued ASU 2018-10, “Codification Improvements to Topic 842, Leases”. The amendment in ASU 2018-10 affects narrow aspects of the guidance issued earlier in ASU 2016-02 by removing certain inconsistencies and providing additional clarification related to the guidance issued earlier. ASU 2018-10 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2018. We are currently evaluating the potential impact this standard may have on our consolidated financial statements.
In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes became effective for our fiscal year beginning October 1, 2018. The most significant change for us, once ASU 2016-01 was adopted, was the accounting treatment for our investments in marketable securities that are classified as available for sale. The accounting treatment used for our Consolidated Financial Statements through Fiscal 2018, was that our investments in marketable securities, classified as available for sale, were carried at fair value, with net unrealized holding gains and losses being excluded from earnings and reported as a separate component of Shareholders’ Equity until realized and the change in net unrealized holding gains and losses being reflected as comprehensive income (loss). Under ASU 2016-01, effective October 1, 2018, these marketable securities continue to be measured at fair value, however the changes in net unrealized holding gains and losses are now recognized through net income. Subsequent to the fiscal yearend, on October 1, 2018, unrealized net holding losses of $24,744,579 were reclassed to beginning retained earnings to recognize the unrealized losses previously recorded in “accumulated other comprehensive income” on our consolidated balance sheets.
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In May 2014,We assess and measure our overall operating results based upon an industry performance measure referred to as Funds From Operations (FFO), which we believe is a useful indicator of our operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. FFO, as defined by the FASB issued ASU 2014-09, “Revenue from Contracts with Customers, which requires an entityNational Association of Real Estate Investment Trusts (Nareit), represents net income attributable to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers”. The FASB issued further guidance in ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”, that provides clarifying guidance in certain narrow areas and adds some practical expedients. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The effective date of ASU 2014-09 was extendedcommon shareholders, as defined by one year by ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”. The new standard is effective for the first interim period within annual reporting periods beginning after December 15, 2017. Therefore, we adopted the standard effective October 1, 2018. Our revenue is primarily derived from leasing activities and historically our property dispositions have been cash sales with no contingencies and no future involvementaccounting principles generally accepted in the property. Since this standard appliesUnited States of America (U.S. GAAP), excluding gains or losses from sales of previously depreciated real estate assets, impairment charges related to all contracts with customers except those that are within the scope of other guidance,depreciable real estate assets, certain non-cash items such as leases,real estate asset depreciation and amortization, plus our portion of these items related to our consolidated investment that we have a non-controlling interest in. Included in the Nareit FFO White Paper - 2018 Restatement, is an option pertaining to assets incidental to our main business in the calculation of Nareit FFO to make an election to include or exclude mark-to-market changes in the value recognized on these marketable equity securities. In conjunction with the adoption of this standard did notthe FFO White Paper - 2018 Restatement, for all periods presented, we have elected to exclude unrealized gains and losses from our investments in marketable equity securities from our FFO calculation. Nareit created FFO as a non-GAAP supplemental measure of REIT operating performance. Our calculation of Adjusted Funds From Operations (AFFO) differs from Nareit’s definition of FFO because we exclude certain items that we view as nonrecurring or impacting comparability from period to period. We define AFFO as FFO, excluding stock based compensation expense, depreciation of corporate office tenant improvements, amortization of deferred financing costs, realized gain on sale of securities transactions, lease termination income, non-recurring strategic alternatives & proxy costs, non-recurring severance expense, effect of non-cash U.S. GAAP straight-line rent adjustments and subtracting recurring capital expenditures, plus our portion of these items related to our consolidated investment that we had a non-controlling interest in. We define recurring capital expenditures as all capital expenditures that are recurring in nature, excluding capital expenditures related to expansions at our current locations or capital expenditures that are incurred in conjunction with obtaining a new lease or a lease renewal. We believe that, as widely recognized measures of performance used by other REITs, FFO and AFFO may be considered by investors as supplemental measures to compare our operating performance to those of other REITs. FFO and AFFO exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have a different cost basis. However, other REITs may use different methodologies to calculate FFO and AFFO and, accordingly, our FFO and AFFO may not be comparable to all other REITs. The items excluded from FFO and AFFO are significant impact oncomponents in understanding our consolidated financial statementsperformance.
FFO and AFFO are non-GAAP performance measures and (i) do not represent Cash Flow from Operations as defined by U.S. GAAP; (ii) should not be considered as an alternative to Net Income or Net Income Attributable to Common Shareholders as a measure of operating performance or to Cash Flows from Operating, Investing and Financing Activities; and (iii) are not an alternative to Cash Flows from Operating, Investing and Financing Activities as a measure of liquidity. FFO and AFFO, as calculated by us, may not be comparable to similarly titled measures reported by other REITs.
The following is a reconciliation of U.S. GAAP Net Income (Loss) Attributable to Common Shareholders to FFO and AFFO for the fiscal years ended September 30th (in thousands):
2021 | 2020 | 2019 | ||||||||||
Net Income (Loss) Attributable to Common Shareholders | $ | 44,764 | $ | (48,617 | ) | $ | 11,026 | |||||
Less/Plus: Unrealized Holding (Gains) Losses Arising During the Periods | (50,239 | ) | 77,380 | 24,680 | ||||||||
Plus: Depreciation Expense (Excluding Corporate Office) | 51,223 | 46,385 | 42,472 | |||||||||
Plus: Amortization of Intangible Assets | 2,339 | 2,137 | 1,986 | |||||||||
Plus: Amortization of Capitalized Lease Costs | 1,256 | 1,124 | 972 | |||||||||
Less: Realized Gain on Sale of Real Estate Investment (1) | (3,252 | ) | -0- | -0- | ||||||||
FFO Attributable to Common Shareholders (2) | 46,091 | 78,409 | 81,136 | |||||||||
Plus: Depreciation of Corporate Office Capitalized Costs | 230 | 234 | 502 | |||||||||
Plus: Stock Compensation Expense | 287 | 452 | 784 | |||||||||
Plus: Amortization of Financing Costs | 1,365 | 1,410 | 1,250 | |||||||||
Plus: Non-recurring Strategic Alternatives & Proxy Costs | 35,920 | -0- | -0- | |||||||||
Plus: Non-recurring Severance Expense | -0- | 786 | -0- | |||||||||
Less: Realized Gain on Sale of Securities Transactions | (2,248 | ) | -0- | -0- | ||||||||
Less: Lease Termination Income | (377 | ) | -0- | -0- | ||||||||
Less: Effect of non-cash U.S. GAAP Straight-line Rent Adjustment | (3,010 | ) | (1,940 | ) | (1,931 | ) | ||||||
Less: Recurring Capital Expenditures | (1,289 | ) | (2,453 | ) | (2,114 | ) | ||||||
AFFO Attributable to Common Shareholders | $ | 76,969 | $ | 76,898 | $ | 79,627 |
(1) | Fiscal 2021 Realized Gain on Sale of Real Estate Investment represents our portion of the net realized gain from the sale of our property that we owned a 51% interest in. |
(2) | FFO Attributable to Common Shareholders for the twelve months ended September 30, 2021 includes Non-recurring Strategic Alternatives & Proxy Costs of $35.9 million. FFO Attributable to Common Shareholders for the twelve months ended September 30, 2021 excluding these Non-recurring Strategic Alternatives & Proxy Costs is $82.0 million. |
Recent Accounting Pronouncements
In April 2020, FASB issued interpretive guidance relating to the accounting for lease concessions provided as a result of the COVID-19 Pandemic that allows entities to treat the concession as if it was a part of the existing contract instead of applying lease modification accounting. This guidance is only applicable to the COVID-19 Pandemic related disclosures.lease concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. We have elected this option relating to qualifying rent deferral and rent abatement agreements. For qualifying lease modifications with rent deferrals, this results in no change to our revenue recognition but an increase in the lease receivable balance until the deferred rent has been repaid. For qualifying lease modifications that include rent abatement concessions, this results in a direct reduction of rental income in the current period.
We do not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying Consolidated Financial Statements.
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ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market-sensitive instruments. The primary market risk to which we believe that we are exposed to is interest rate risk. Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevalent market interest rates. Many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control contribute to interest rate risk.
We are exposed to interest rate changes primarily as a result of our unsecured line of credit facility, margin loans and long-term debt used to maintain liquidity and fund capital expenditures and acquisitions of our real estate investment portfolio. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve our objectives, we match our assets, which are properties secured by long-term leases, with our liabilities, which are long-term fixed rate loans.
Approximately $719,768,000As of September 30, 2021, $839.6 million of our long-term debt as of September 30, 2018 bears a fixed weighted average interest rate of 4.07%3.86%. Therefore, changes in market interest rates affect the fair value of these instruments. As of September 30, 2018,2021, our variable rate debt consists of $160,000,000$75.0 million outstanding on our Term Loan and $175.0 million drawn down under our $225.0 million Revolver. To reduce floating interest rate exposure under our Term Loan, we also entered into an interest rate swap agreement to fix LIBOR on the Facility and $26,608,676 drawn down onentire $75.0 million for the margin linefull duration of credit.the Term Loan resulting in an all-in rate of 2.92%. Currently, our borrowings bear interest under the Revolver at LIBOR plus 145 basis points, which results in an interest rate of 1.53%. If market rates of interest on our variable rate debt increased or decreased by 1%, then the annual increase or decrease in interest costs on our variable rate debt would be approximately $1,866,000$2.5 million and the increase or decrease in the fair value of our fixed rate debt as of September 30, 20182021 would be approximately $29,000,000.$37.7 million.
The following table sets forth information as of September 30, 2018,2021, concerning our long-term debt obligations, including principal payments by scheduled maturity, weighted average interest rates and estimated fair value:value (in thousands):
Mortgage Notes Payable | Loans Payable (1) | Mortgage Notes Payable | Loans Payable | |||||||||||||||||||||||||||||||||||||||||||||
Weighted | Weighted | Weighted | Weighted | |||||||||||||||||||||||||||||||||||||||||||||
Fiscal Year | Average | Average | Average | Average | ||||||||||||||||||||||||||||||||||||||||||||
Ending September 30, | Carrying Value | Interest Rate | Fair Value | Carrying Value | Interest Rate | Fair Value | Carrying Value | Interest Rate | Fair Value | Carrying Value | Interest Rate | Fair Value | ||||||||||||||||||||||||||||||||||||
2019 | $ | 12,361,789 | 6.93 | % | $ | 26,608,676 | 2.75 | % | ||||||||||||||||||||||||||||||||||||||||
2020 | 2,314,257 | 6.09 | % | 160,000,000 | 3.90 | % | ||||||||||||||||||||||||||||||||||||||||||
2021 | 860,364 | 6.50 | % | -0- | ||||||||||||||||||||||||||||||||||||||||||||
2022 | 29,880,645 | 5.24 | % | -0- | $ | 16,170 | 5.11 | % | $ | -0- | ||||||||||||||||||||||||||||||||||||||
2023 | 3,719,709 | 3.95 | % | -0- | 1,104 | 3.95 | % | -0- | ||||||||||||||||||||||||||||||||||||||||
2024 | 24,232 | 3.92 | % | 175,000 | 1.53 | % | ||||||||||||||||||||||||||||||||||||||||||
2025 | 17,264 | 5.26 | % | 75,000 | 2.92 | % | ||||||||||||||||||||||||||||||||||||||||||
2026 | 7,757 | 3.94 | % | -0- | ||||||||||||||||||||||||||||||||||||||||||||
Thereafter | 670,631,591 | 3.96 | % | -0- | 773,095 | 3.80 | % | -0- | ||||||||||||||||||||||||||||||||||||||||
Total | $ | 719,768,355 | 4.07 | % | $ | 706,745,000 | $ | 186,608,676 | 3.74 | % | $ | 186,609,000 | $ | 839,622 | 3.86 | % | $ | 885,893 | $ | 250,000 | 1.95 | % | $ | 252,230 |
The $250.0 million Loans Payable in the table above represents our $75.0 million outstanding on our Term Loan and $175.0 drawn down under our Revolver. On August 27, 2015,November 15, 2019, we obtained an unsecured revolving lineentered into a New Facility consisting of credit (the “Facility”). The Facility is syndicated with three banks led by BMO, as sole lead arrangera $225.0 million Revolver and sole book runner, Bank of Montreal as administrative agent, and includes JPMorgan Chase Bank, N.A. (J.P. Morgan) and RBC Capital Markets (RBC) as co-syndication agents. The Facility provided for up to $130,000,000a $75.0 million Term Loan, resulting in available borrowings with a $70,000,000 accordion feature, bringing the total potential availability up to $200,000,000, subject to certain conditions. The Facility was set to mature in August 2019under both the Revolver and had a one-year extension option, at our option. On September 30, 2016, we entered intothe Term Loan of $300.0 million, which is an amendment toadditional $100.0 million over the Facility (the Amendment), pursuant to which we exercisedformer line of credit facility. In addition, the $70,000,000Revolver includes an accordion feature under the Facility, bringing the maximum availability under the Facility to $200,000,000, and amended the Facility to provide an additional $100,000,000 accordion feature, bringingthat will allow the total potential availability upunder the New Facility to $300,000,000, subjectfurther increase to certain conditions, including, without limitation, obtaining commitments from additional lenders. In addition, the Amendment extended the maturity date of the Facility from August 27, 2019 to September 30, 2020, with a one-year extension option, at our option, subject to$400.0 million, under certain conditions. The $225.0 million Revolver matures in January 2024 with two options to extend for additional six-month periods. Availability under the New Facility is limited to 60% of the value of the borrowing base properties. The value of the borrowing base properties is determined by applying a capitalization rate to the NOI generated by our unencumbered, wholly-owned industrial properties. Effective, March 22, 2018,Under the New Facility the capitalization rate applied to our NOI generated by our unencumbered, wholly-owned industrial properties was lowered from 7.0%6.5% under the former line of credit facility to 6.5%6.25%, thus increasing the value of the borrowing base properties under the terms of the agreement. BorrowingsNew Facility. In addition, the interest rate for borrowings under the Facility,Revolver was lowered by a range of 5 basis points to 35 basis points, depending on our leverage ratio, and will, at our election, either i) bear interest at LIBOR plus 140135 basis points to 220205 basis points, depending on our leverage ratio, or ii) bear interest at Bank of Montreal’s (BMO) prime lending rate plus 35 basis points to 105 basis points, depending on our leverage ratio. Currently, our borrowings bear interest under the Revolver at LIBOR plus 145 basis points, which results in an interest rate of 1.53%. As of the fiscal yearend and currently, we have $175.0 million drawn down under our Revolver, resulting in $50.0 million being currently available. Including the accordion feature, we have up to $150.0 million potentially available under the Revolver. As of September 30, 2021, Loans Payable represented $75.0 million outstanding under our Term Loan which matures January 2025 and $175.0 million outstanding under our Revolver which matures January 2024. The interest rate for borrowings under the Term Loan will at our election, either i) bear interest at LIBOR plus 130 basis points to 200 basis points, depending on our leverage ratio, or ii) bear interest at BMO’s prime lending rate plus 4030 basis points to 120100 basis points, depending on our leverage ratio. Our borrowings as of September 30, 2018, based on our leverage ratio as of September 30, 2018, bearTo reduce floating interest at LIBOR plus 170 basis points, which was atrate exposure under the Term Loan, we also entered into an interest rate swap agreement to fix LIBOR on the entire $75.0 million for the full duration of 3.90% asthe Term Loan resulting in an all-in rate of 2.92%. The unrealized loss in fair value of the interest rate swap agreement amounted to $(2.2) million for the year ended September 30, 2018. As of September 30, 2018, $160,000,000 was drawn down under the Facility. Subsequent to fiscal yearend, on October 9, 2018, we paid down $50,000,000 on the Facility which reduced our amount outstanding to $110,000,000.2021.
We also invest in marketable securities of other REITs and we are primarily exposed to market price risk from adverse changes in market rates and conditions. We generally limit our marketable securities investmentsthe size of this portfolio to no more than approximately 10%5% of our undepreciated assets, (which is ourwhich we define as total assets excluding accumulated depreciation).depreciation. All securities are classified as available for sale and are carried at fair value. We also use margin loans from time to time for purchasing securities, for temporary funding of acquisitions, and for working capital purposes. The margin loans are due on demand and are collateralized by our securities portfolio. In general, we may borrow up to 50% of the value of the marketable securities. At September 30, 20182021 and 2017,2020, there was $26,608,676 and $10,091,417 outstandingno amount drawn down under the margin loans, respectively.loan. The interest rate on the margin account is the bank’s margin rate and was 2.75% and 2.05% as of September 30, 2018 and 2017, respectively. Subsequent to fiscal yearend, on October 9, 2018, we paid off the margin loan.is 0.75%. The value of the marketable securities was $154,920,545$143.5 million as of September 30, 2018,2021, representing 8.0%5.6% of our undepreciated assets (which is our total assets excluding accumulated depreciation).
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ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data listed in Part IV, Item 15 (a) (1) are incorporated herein by reference and filed as part of this report.
The following is the Unaudited Selected Quarterly Financial Data:
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
THREE MONTHS ENDED (in thousands)
FISCAL 2018 | 12/31/17 | 3/31/18 | 6/30/18 | 9/30/18 | ||||||||||||
Rental and Reimbursement Revenue | $ | 32,741,822 | $ | 33,621,508 | $ | 36,197,825 | $ | 36,600,694 | ||||||||
Lease Termination Income | 210,261 | -0- | -0- | -0- | ||||||||||||
Total Expenses | 16,267,991 | 16,920,664 | 19,073,092 | 19,471,976 | ||||||||||||
Other Income (Expense) | (4,441,577 | ) | (5,055,841 | ) | (4,651,340 | ) | (4,969,095 | ) | ||||||||
Income from Continuing Operations | 12,242,515 | 11,645,003 | 12,473,393 | 12,159,623 | ||||||||||||
Income from Continuing Operations per diluted share | $ | 0.16 | $ | 0.15 | $ | 0.16 | $ | 0.15 | ||||||||
Gain on Sale of Real Estate Investment | 5,387,886 | -0- | 2,097,380 | -0- | ||||||||||||
Net Income | 17,630,401 | 11,645,003 | 14,570,773 | 12,159,623 | ||||||||||||
Net Income per diluted share | $ | 0.23 | $ | 0.15 | $ | 0.18 | $ | 0.15 | ||||||||
Net Income Attributable to Common Shareholders | 13,313,455 | 7,396,784 | 10,322,744 | 7,782,361 | ||||||||||||
Net Income Attributable to Common Shareholders per diluted share | $ | 0.17 | $ | 0.10 | $ | 0.13 | $ | 0.10 | ||||||||
FISCAL 2017 | 12/31/16 | 3/31/17 | 6/30/17 | 9/30/17 | ||||||||||||
Rental and Reimbursement Revenue | $ | 27,891,442 | $ | 28,018,022 | $ | 29,318,927 | $ | 31,156,914 | ||||||||
Total Expenses | 13,972,561 | 14,495,329 | 14,840,339 | 16,294,148 | ||||||||||||
Other Income (Expense) | (4,064,960 | ) | (5,098,082 | ) | (2,748,225 | ) | (4,600,576 | ) | ||||||||
Income from Continuing Operations | 9,853,921 | 8,424,611 | 11,730,363 | 10,262,190 | ||||||||||||
Income from Continuing Operations per diluted share | $ | 0.14 | $ | 0.12 | $ | 0.16 | $ | 0.14 | ||||||||
Net Income | 9,853,921 | 8,424,611 | 11,730,363 | 10,262,190 | ||||||||||||
Net Income per diluted share | $ | 0.14 | $ | 0.12 | $ | 0.16 | $ | 0.14 | ||||||||
Net Income Attributable to Common Shareholders | 6,156,161 | 4,842,575 | 5,217,411 | 6,726,087 | ||||||||||||
Net Income Attributable to Common Shareholders per diluted share | $ | 0.09 | $ | 0.07 | $ | 0.07 | $ | 0.09 |
FISCAL 2021 | 12/31/20 | 3/31/21 | 6/30/21 | 9/30/21 | ||||||||||||
Rental and Reimbursement Revenue | $ | 43,583 | $ | 46,365 | $ | 45,993 | $ | 46,815 | ||||||||
Total Expenses | 22,159 | 25,620 | 32,040 | 49,300 | ||||||||||||
Unrealized Holding Gains (Losses) Arising During the Periods | 19,721 | 19,186 | 16,471 | (5,139 | ) | |||||||||||
Other Income (Expense) | 12,169 | 13,634 | 14,648 | (13,286 | ) | |||||||||||
Net Income (Loss) Attributable to Shareholders | 33,916 | 34,329 | 25,709 | (15,771 | ) | |||||||||||
Net Income (Loss) Attributable to Shareholders per diluted share | $ | 0.34 | $ | 0.35 | $ | 0.26 | $ | (0.16 | ) | |||||||
Net Income (Loss) Attributable to Common Shareholders | 25,746 | 25,913 | 17,292 | (24,187 | ) | |||||||||||
Net Income (Loss) Attributable to Common Shareholders per diluted share | $ | 0.26 | $ | 0.26 | $ | 0.17 | $ | (0.25 | ) |
FISCAL 2020 | 12/31/19 | 3/31/20 | 6/30/20 | 9/30/20 | ||||||||||||
Rental and Reimbursement Revenue | $ | 41,700 | $ | 41,707 | $ | 41,775 | $ | 42,635 | ||||||||
Total Expenses | 22,428 | 21,264 | 21,459 | 21,529 | ||||||||||||
Unrealized Holding Gains (Losses) Arising During the Periods | (3,635 | ) | (83,075 | ) | 19,610 | (10,280 | ) | |||||||||
Other Income (Expense) | (9,606 | ) | (88,721 | ) | 12,979 | (17,963 | ) | |||||||||
Net Income (Loss) Attributable to Shareholders | 9,625 | (68,314 | ) | 33,458 | 3,088 | |||||||||||
Net Income (Loss) Attributable to Shareholders per diluted share | $ | 0.10 | $ | (0.70 | ) | $ | 0.34 | $ | 0.03 | |||||||
Net Income (Loss) Attributable to Common Shareholders | 3,528 | (75,078 | ) | 26,850 | (3,917 | ) | ||||||||||
Net Income (Loss) Attributable to Common Shareholders per diluted share | $ | 0.04 | $ | (0.77 | ) | $ | 0.27 | $ | (0.04 | ) |
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ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There were no changes in, or any disagreements with, our independent registered public accounting firm on accounting principles and practices or financial disclosure during the years ended September 30, 20182021 and 2017.2020.
ITEM 9A- CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures
Management, with the participation of our Chief Executive Officer and our Chief Financial and Accounting Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Securities Exchange Act of 1934 Rule 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and our Chief Financial and Accounting Officer concluded that our disclosure controls and procedures were effective as of September 30, 2018.2021.
(b) Management’s Report on Internal Control Over Financial Reporting
Management of the Company is responsible for establishing and maintaining effective internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).
Management assessed our internal control over financial reporting as of September 30, 2018.2021. This assessment was based on criteria for effective internal control over financial reporting established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2013 framework). Based on this assessment, management has concluded that our internal control over financial reporting was effective as of September 30, 2018.2021.
PKF O’Connor Davies, LLP, our independent registered public accounting firm, has issued their report on their audit of our internal control over financial reporting, a copy of which is included herein.
(c) Report of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of
Monmouth Real Estate Investment Corporation
Opinion on Internal Control over Financial Reporting
We have audited Monmouth Real Estate Investment Corporation’s (the “Company”) internal control over financial reporting as of September 30, 2018,2021, based on criteria established inInternal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2018,2021, based on criteria established inInternal Control–Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of September 30, 20182021 and 2017,2020, and the related consolidated statements of income (loss), comprehensive income (loss), shareholders’ equity and cash flows for each of the three years in the period ended September 30, 2018,2021, and our report dated November 28, 2018,12, 2021, expressed an unqualified opinion thereon.
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Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ PKF O’Connor Davies, LLP
November 28, 201812, 2021
New York, New York
(d) Changes in Internal Control over Financial Reporting
There have been no changes to our internal controls over financial reporting during our fourth fiscal quarter ended September 30, 20182021 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
None.
ITEM 9C – DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
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ITEM 10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following are our Directors and Executive Officers as of September 30, 2018:
Name | Age | Present Position with the Company; Business Experience During Past Five Years; Other Directorships | Director Since | Class (1) | ||||
Kiernan Conway | 56 | Independent Director. (2)Director of Research and Corporate Engagement of the Alabama Center for Real Estate, and Chief Economist of the CCIM (Certified Commercial Investment Member) Institute (2017-present). Prior Senior Vice-President of Credit Risk Management for Sun Trust in Atlanta, GA (2014-2017). U.S. Chief Economist for Colliers International (2010-2014). Prior affiliations with Federal Reserve in Atlanta, GA, South Trust Bank, Cushman and Wakefield, Equitable Real Estate, Wells Fargo Bank and Deloitte and Touche. Mr. Conway’s extensive experience as an economist with expertise in real estate, real estate finance and logistics are the primary reasons, among others, why Mr. Conway was selected to serve on our Board. | 2018 | II | ||||
Daniel D. Cronheim | 64 | Director. Attorney at Law (1979 to present).Certified Property Manager (2010 to present) from Institute of Real Estate Management (“IREM”). President (2000 to present) of David Cronheim Mortgage Corp., a privately-owned real estate investment bank. Executive Vice President (1997 to present) of Cronheim Management Services, Inc., a real estate management firm. Executive Committee (2012 to present), Secretary-Treasurer (2013-2015), Vice-President 2015-2016), and President (2016 to present) of IREM Chapter One (New Jersey). Member and instructor of the New Jersey State Bar Association Land Use Committee (2014 to present) and Legislative subcommittee chair (2018 to present). Mr. Cronheim’s extensive experience in real estate management and the mortgage industry is the primary reason, among others, why Mr. Cronheim was selected to serve on our Board. | 1989 | I | ||||
Catherine B. Elflein | 57 | Independent Director. (2) Certified Public Accountant. Senior Director – Risk Management (2006 to present) at Celgene Corporation, a biopharmaceutical company; Controller of Captive Insurance Companies (2004 to 2006) and Director – Treasury Operations (1998 to 2004) at Celanese Corporation. Ms. Elflein’s extensive experience in accounting, finance and risk management is the primary reason, among others, why Ms. Elflein was selected to serve on our Board. | 2007 | III |
Name | Age | Present Position with the Company; Business Experience During Past Five Years; Other Directorships | Director Since | Class (1) | ||||
Brian H. Haimm | 49 | Lead Independent Director.(2) Chief Financial Officer and Chief Operating Officer (2006 to present) of Ascend Capital Group International, LLC, a private equity firm. Mr. Haimm’s extensive experience in accounting, finance and the real estate industry is the primary reason, among others, why Mr. Haimm was selected to serve on our Board. | 2013 | II | ||||
Neal Herstik | 59 | Independent Director. (2) Attorney at Law, Gross, Truss & Herstik, PC (1997 to present). Mr. Herstik’s extensive legal experience and experience in the real estate industry is the primary reason, among others, why Mr. Herstik was selected to serve on our Board. | 2004 | II | ||||
Matthew I. Hirsch | 59 | Independent Director. (2)Attorney at Law (1985 to present), Law Office of Matthew I. Hirsch; Adjunct Professor of Law, Delaware Law School of Widener University (1993 to present).
For UMH Properties, Inc. (UMH), a related company, Director (2013 to present).
Mr. Hirsch’s experience with real estate transactions, legal issues relating to real estate and the real estate industry is the primary reason, among others, why Mr. Hirsch was selected to serve on our Board. | 2000 | II | ||||
Eugene W. Landy | 84 | Founder and Chairman of the Board (1968 to present), and Executive Director. President and Chief Executive Officer (1968 to April 2013). Attorney at Law. Chairman of the Board (1995 to present).
For UMH Properties, Inc., a related company, Founder and Chairman of the Board (1969 to present), and President (1969 to 1995).
As our Founder and Chairman, Mr. Landy’s unparalleled experience in real estate investing is the primary reason, among others, why Mr. Landy was selected to serve on our Board. | 1968 | III |
Name | Age | Present Position with the Company; Business Experience During Past Five Years; Other Directorships | Director Since | Class (1) | ||||
Michael P. Landy | 56 | President and Chief Executive Officer (April 2013 to present) and Executive Director. Chief Operating Officer (2011 to April 2013), Executive Vice President (2009 to 2010), Executive Vice President-Investments (2006 to 2009), and Vice President-Investments (2001 to 2006). Member of New York University’s REIT Center Board of Advisors (2013 to present). Member of Nareit’s Advisory Board of Governors (2018 to present).
For UMH Properties, Inc., a related company, Director (2011 to present).
Mr. Landy’s role as our President and Chief Executive Officer and extensive experience in real estate finance, investment, capital markets and operations management are the primary reasons, among others, why Mr. Landy was selected to serve on our Board. | 2007 | III | ||||
Samuel A. Landy | 58 | Director.Attorney at Law.
For UMH Properties, Inc., a related company, President and Chief Executive Officer (1995 to present), Vice President (1991 to 1995) and Director (1992 to present).
Mr. Landy’s extensive experience in real estate investment and REIT leadership is the primary reason, among others, why Mr. Landy was selected to serve on our Board. | 1989 | III | ||||
Kevin S. Miller
| 49 | Chief Financial Officer (July 2012 to present) and Chief Accounting Officer (May 2012 to present) and Executive Director. Certified Public Accountant. Assistant Controller and Assistant Vice-President (2005 to May 2012) of Forest City Ratner, a real estate developer, owner and operator and a wholly-owned subsidiary of a publicly-held company, Forest City Realty Trust, Inc. Mr. Miller’s extensive experience in accounting, finance and the real estate industry is the primary reason, among others, why Mr. Miller was selected to serve on our Board. | 2017 | I | ||||
Allison Nagelberg | 53 | General Counsel (2000 to present).Attorney at Law (1989 to present). Ms. Nagelberg also has a Master of Business Administration in Finance. Ms. Nagelberg is a member of the Rutgers Center for Real Estate Advisory Board (2017 to present). | N/A | N/A |
Name | Age | Present Position with the Company; Business Experience During Past Five Years; Other Directorships | Director | Class (1) | ||||
Gregory T. Otto | 30 | Independent Director. (2) Maritime Professional (2011 to present) with experiences in commerce, maritime security, and intermodal logistics. Consultant for Entegra Systems (2018 to present), focused on maritime business and security services. Port Operations Coordinator and Merchant Marine Deck Officer for Maersk Line (2011 to 2014). Lieutenant in the U.S. Naval Reserves (2011 to present), specializing in maritime intelligence. Mr. Otto’s experience in commerce, global markets, and intermodal logistics is the primary reason, among others, why Mr. Otto was selected to serve on our Board. | 2017 | I | ||||
Scott L. Robinson | 48 | Independent Director. (2) Managing Director, Oberon Securities (2013 to Present); Clinical Professor of Finance and Director of The REIT Center at New York University (2008 to Present); Managing Partner, Cadence Capital Group (2009 to 2013); Vice President, Citigroup (2006 to 2008); Senior REIT and CMBS analyst (1998 to 2006), Standard & Poor’s. Mr. Robinson’s extensive experience in real estate finance and investment is the primary reason, among others, why Mr. Robinson was selected to serve on our Board. | 2005 | I | ||||
Stephen B. Wolgin | 64 | Independent Director. (2) Managing Director of U.S. Real Estate Advisors, Inc. (2000 to present), a real estate advisory services group based in New Jersey. Prior Partner with the Logan Asset Backed Fund, LP (2007 to 2017). Prior affiliations with J.P. Morgan, Odyssey Associates, The Prudential Realty Group, Standard & Poor’s Corporation, and Grubb and Ellis.
For UMH Properties, Inc., a related company, Director (2007 to present).
Mr. Wolgin’s extensive experience in real estate finance and investment are the primary reasons, among others, why Mr. Wolgin was selected to serve on our Board. | 2003 | II |
All officers serve at the pleasure of the Board of Directors, subjectinformation required by this item is incorporated herein by reference to the rights, if any,definitive proxy statement for the Company’s 2021 annual meeting of any officer under any employment contract. Officers are elected by the Board of Directors annually and as maystockholders to be appropriate to fill a vacancy in an office.
With the addition of Mr. Conway to our Board of Directors on September 13, 2018, we have increased our percentage of independent directors from approximately 58% to 62%.
Family Relationships
There are no family relationships between any of the directors or executive officers,filed with the exception of Samuel A. LandySEC pursuant to Regulation 14A and Michael P. Landy who are the sons of our Founder, Eugene W. Landy, who is the Chairman of the Board and an Executive Director.
Audit Committee
We have a separately-designated standing audit committee whose members are Brian H. Haimm (Chairman), Catherine B. Elflein, Stephen B. Wolgin, Matthew I. Hirsch and Scott L. Robinson. Our Board has determined that Brian H. Haimm, Catherine B. Elflein, Scott L. Robinson and Stephen B. Wolgin are audit committee financial experts and that all members of the audit committee are independent as required by the listing standards of the NYSE. The audit committee operatesinformation included under the Audit Committee Charter, which can be found atcaption “Information about our website atwww.mreic.reit. The charter is reviewed annually for adequacy.Executive Officers” in Part I hereof, in accordance with General Instruction G(3) to Form 10-K.
Compensation Committee
We have a separately-designated standing compensation committee, consisting of three of our independent directors: Brian H. Haimm (Chairman), Matthew I. Hirsch and Gregory T. Otto. Our Board has determined that all members of the Compensation Committee are independent as required by the listing standards of the NYSE. The Compensation Committee operates under the Compensation Committee Charter, which can be found at our website atwww.mreic.reit. The Compensation Committee charter is reviewed annually for adequacy. The role of the Compensation Committee is discussed in greater detail below in the section on Executive Compensation.
Nominating and Corporate Governance Committee
We have a separately-designated standing nominating and corporate governance committee, consisting of three of our independent directors: Matthew I. Hirsch (Chairman), Gregory T. Otto and Stephen B. Wolgin. Our Board has determined that all members of the Nominating and Corporate Governance Committee are independent as required by the listing standards of the NYSE. The Nominating and Corporate Governance Committee operates under the Nominating and Corporate Governance Committee Charter, which can be found at our website atwww.mreic.reit. The charter is reviewed annually for adequacy. Among its other responsibilities, the Nominating and Corporate Governance Committee identifies and evaluates candidates to be nominated as directors, which may include candidates put forward by shareholders. Qualifications considered by the Nominating and Corporate Governance Committee in evaluating nominees include, but are not limited to, a candidate’s judgment, skill, experience with businesses and organizations comparable to the Company, the interplay of the candidate’s experience with the experience of other Board members, the candidate’s independence according to the rules of the New York Stock Exchange, diversity, and the extent to which the candidate would be a desirable addition to the Board and any of its committees.
Section 16(a) Beneficial Ownership Reporting Compliance
There have been no delinquent filings pursuant to Item 405 of regulation S-K, to the best of management’s knowledge.
Code of Ethics
We have adopted the Code of Business Conduct and Ethics applicable to our Chief Executive Officer and Chief Financial Officer, as well as our other officers, directors and employees (Code of Ethics). The Code of Ethics can be found at our website atwww.mreic.reit. The Code of Ethics is also available in print to any person without charge who requests a copy by writing or telephoning us at the following address and telephone number: Monmouth Real Estate Investment Corporation, Attention: Stockholder Relations, 3499 Route 9 North, Suite 3-D, Juniper Business Plaza, Freehold, New Jersey 07728, (732) 577-9996. We will satisfy any disclosure requirements under Item 5.05(c) of Form 8-K regarding a waiver from any provision of the Code of Ethics for principal officers or directors by disclosing the nature of such amendment of waiver on our website atwww.mreic.reit.
Corporate Governance Materials
Our Corporate Governance Guidelines and Code of Business Conduct and Ethics and the charters for the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are published on the Corporate Governance page of the Investor Relations section on our website atwww.mreic.reit. (We are not including the other information contained on, or available through, our website as a part of, or incorporating such information by reference into, this 10-K. Such information includes, but is not limited to, our Commitment to Environment and Society and our Vendor Code of Conduct.)
ITEM 11 - EXECUTIVE COMPENSATION
The following table highlights important aspects of our executive compensation program, which promote good governance and serve the interests of our shareholders.
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Compensation Discussion and Analysis
Overview of Compensation Program
The Compensation Committee (for purposes ofinformation required by this Compensation Discussion and Analysis, the “Committee”) of the Board has been appointed to implement and exercise the Board’s responsibilities relatingitem is incorporated herein by reference to the compensation of our executive officers and directors. The Committee has the overall responsibility for evaluating and approving our executive compensation plan, policies and programs, and does not delegate this responsibility to any other person(s). The Committee’s primary objectives include serving as an independent and objective party to review such compensation plan, policies and programs. To assist in the process, the Committee has, from time to time, retained the advice of a compensation consultant as outlined below in the section entitled Engagement of Compensation Consultant.
Throughout this report, the individuals who served as our Chairman of the Board, the President and Chief Executive Officer and other officers included in the Summary Compensation Table presented below of this report, are sometimes referred to in this report as the Named Executive Officers.
Since 1968, we have delivered consistent and reliable returns for our shareholders. Over the last 10 years, we have outperformed the MSCI US REIT Index by a wide margin of approximately three times. Our total shareholder return (TSR) over the last 10 fiscal years through September 30, 2018 was 303% as compared to 106%definitive proxy statement for the MSCI US REIT Index during the same period. TSR includes both dividends reinvested and stock price appreciation. Historically, REIT dividends have accounted for approximately 65%Company’s 2021 annual meeting of total shareholder return. We believe that it is essential that dividends be factored into evaluating a REIT’s economic performance. Our dividend has provenstockholders to be very reliable because our industrial properties are predominantly subject to long-term net leases to investment-grade tenants or their subsidiaries. In view of the substantial progress made by us during fiscal year 2017, on October 2, 2017, our Board of Directors approved a 6.3% increase in our quarterly common stock dividend, raising it to $0.17 per share from $0.16 per share. This represents an annualized dividend rate of $0.68 per share. This increase was the second dividend increase within two years. The prior dividend increase was on October 1, 2015, at which time our Board of Directors approved a 6.7% increase in our quarterly common stock dividend, raising it to $0.16 per share from $0.15 per share. These two dividend raises represent a total increase of 13%. We have maintained or increased our common stock cash dividend for 27 consecutive years. We are one of the few REITs that maintained our dividend throughout the Global Financial Crisis. We are also one of the few REITs that is paying out a higher per share dividend today than prior to the Global Financial Crisis.
The following charts illustrate our outperformance over a 10-year period as compared to the S&P 500 Index and the MSCI US REIT Index for the same period and our outperformance over a 1-year period as compared to the MSCI US REIT Index for the same period:
The following chart illustrates our growth in Capital Structure over the last five years:
Compensation Philosophy and Objectives
The Committee believes that a well-designed compensation program should align the interests of the Named Executive Officersfiled with the interests of the shareholders, and that a significant part of the executives’ compensation, over the long term, should be dependent upon the value created for shareholders. In addition, all executives should be held accountable through their compensation for our performance and compensation levels should reflect the executives’ individual performance in an effort to encourage increased individual contributions to our performance. This compensation philosophy, as reflected in our employment agreements with our executives and the overall compensation program, is designed to motivate our executives to focus on operating results and create long-term shareholder value by:
The salaries and bonuses in our executive employment agreements are consistent with the Committee’s philosophy and objectives.
The Committee believes that each of the above factors is important when determining compensation levels for Named Executive Officers. The Committee reviews and approves the employment contracts for the Chairman of the Board, the President and Chief Executive Officer and the other Named Executive Officers, and reviews and approves the performance goals and objectives applicable to their performance-based compensation. The Committee annually evaluates the performance of the Named Executive Officers in light of those goals and objectives. The Committee considers our performance, relative shareholder return, the total compensation provided to comparable officers at similarly-situated companies, and compensation earned by the Named Executive Officers in prior years.
The Committee believes that the executive compensation packages that we provide to our Named Executive Officers should include both base salaries and annual bonus awards that reward corporate and individual performance, as well as give incentives to executives to meet or exceed established goals. As a result, an important portion of our compensation program is comprised of discretionary bonuses and equity awards as determined by the Committee in recognition of individual accomplishments and achievements, as well as overall company performance.
Historically, the Committee has used the annual Compensation Survey published by NAREIT (Survey) as a guide to setting compensation levels. Total executive compensation paid by us fell within the lowest range (25th percentile) within the REIT industry for REITs with comparable data based upon the 2018 Compensation Survey published by NAREIT. Participant company data is not presented within the Survey in a manner that specifically identifies any named individual or company. This Survey details compensation by position type and company size with statistical salary and bonus information for each position. The subsets presented in the Survey which the Committee also uses for comparison purposes are the industrial property sector, entities with a total market capitalization between $1.5 billion and $3.0 billion and entities with less than 75 full-time employees. The Committee compares our salary and bonus amounts to the ranges presented in this Survey for reasonableness.
During the last quarter of fiscal 2017, the Committee engaged FPL Associates (FPL), a nationally recognized compensation consulting firm specializing in the REIT industry, to provide market-based compensation data and to advise the Committee on industry trends and best practices. As a result of the compensation analysis, the Committee is exploring the possibility of providing for a greater percentage of total compensation for our Named Executive Officers to be paid in the form of performance-based equity.
Role of Executive Officers in Compensation Decisions
The Committee recommends to the Board all compensation decisions with respect to our Named Executive Officers. The Chairman of the Board and the President and Chief Executive Officer review the performance of the other Named Executive Officers and then present their conclusions and recommendations to the Committee with respect to base salary adjustments, annual cash bonuses and stock options or restricted stock awards. The Committee exercises its own discretion in modifying and implementing any recommended adjustments or awards but does consider the recommendations from management who work closely with the other Named Executive Officers.
Role of Grants of Stock Options and Restricted Stock in Compensation Analysis
The Committee views the grant of stock options and restricted stock awards as a form of long-term compensation. The Committee believes that such grants promote our goal of retaining key employees and align the key employees’ interests with those of our shareholders from a long-term perspective. The number of options or shares of restricted stock granted to each employee, and the performance or time-based vesting criteria associated with each grant, is determined by consideration of various factors including but not limited to the employee’s contribution, title, responsibilities, and years of service. The Committee takes outstanding awards of stock options and restricted stock into account in making its compensation determinations.
Role of Employment Agreements in Determining Executive Compensation
Each of our currently employed Named Executive Officers is a party to an employment agreement. These agreements establish the base salaries, bonuses and customary fringe benefits for each Named Executive Officer. The employment agreements also provide for certain severance benefits in the event the Named Executive Officer’s employment is terminated. The employment agreements also provide for certain severance benefits in the event of a change in control and to alleviate the financial impact of termination of employment, through base salary and health benefit continuation with the intention of providing for a stable work environment. In determining initial compensation, as incorporated into the employment agreements, the Committee considers all elements of a Named Executive Officer’s total compensation package in comparison to current market practices and other benefits. In reviewing and setting compensation for the Named Executive Officers, the Committee takes the terms of the employment agreements into consideration.
Shareholder Advisory Vote
One way to determine if our compensation program reflects the interests of shareholders is through their non-binding advisory vote on our executive compensation practices. At the Annual Meeting of Shareholders held on May 17, 2018, approximately 92% of votes cast (excluding broker non-votes) were voted in favor of our Say-On-Pay proposal, which we believe affirms our shareholders’ support of our approach to our executive compensation program.
We provide our shareholders with the opportunity to vote annually on the advisory approval of the compensation of our Named Executive Officers (Say-on-Pay proposal). The Committee will continue to consider the outcome of our Say-on-Pay proposals when making future compensation decisions for our Named Executive Officers.
Engagement of Compensation Consultant
Pursuant to its charter, the Committee is authorized to retain the services of an executive compensation advisor, in its discretion, to assist with the establishment and review of our compensation programs and related policies. The Committee did not retain a compensation consultant for prior years because the Committee determined that the Survey and other information available to it provided comprehensive information regarding executive compensation levels and structure. In August 2017, the Committee engaged FPL to provide additional market-based compensation data and to advise on industry trends and best practices. In order to help the Committee fairly evaluate our executive compensation in light of our relative economic performance, FPL prepared for the Committee a peer group of REITs with similar total capitalization, ranging between $1.4 billion and $4.0 billion (approximately 0.7x-2.0x Monmouth’s total capitalization at that time), and/or REITs that operate within the industrial REIT sector and with whom we compete for executive employees.
The peer group of comparable REITs (Comparable REITS) identified by FPL are as follows:
Agree Realty Corporation
EastGroup Properties*
Getty Realty Corporation
Hersha Hospitality Trust
LTC Properties, Inc.
Rexford Industrial Realty, Inc.*
STAG Industrial, Inc.*
Terreno Realty Corporation*
TIER REIT, Inc.
Urstadt Biddle Properties Inc.
*Denotes a peer that is in the Industrial sector
FPL compared our aggregate pay and performance to those of our peers over the prior three-year period. Based upon this analysis, FPL concluded that our aggregate pay at that time ranked at the lowest end of the aggregate pay provided by our peers, and that our performance by Total Shareholder Return was at the highest end of performance of our peers.
The Committee used this data as one tool in considering compensation for our Named Executive Officers for compensation decisions beginning in fiscal 2018. Information about peers includes but is not limited to: base salaries, annual bonuses, long-term equity incentives, composition ranges by position, governance practices, market trends and industry performance. The peer group compensation analyses prepared by FPL have been utilized by the Compensation Committee for informational purposes only and have not been, and will not be utilized for benchmarking purposes as we do not have formal benchmarking policies for comparing to our peers or the market. The Compensation Committee’s executive compensation determinations are subjective and the result of the Compensation Committee’s business judgment, which is informed by peer group data provided by FPL and will continue to be informed by the experiences of the members of the Compensation Committee. The Compensation Committee ultimately uses its own judgment in making final decisions regarding the compensation paid to our executive officers.
Other than advising the Committee as described above, FPL did not provide any other services to us. The Committee has sole authority to hire, terminate and set the terms of engagement with FPL. The Committee has considered the independence of FPL, consistent with the requirements of NYSE, and has determined that FPL is independent. Further,SEC pursuant to SEC rules, the Committee conducted a conflicts of interest assessment and determined that there are no conflicts of interest resulting from retaining FPL. FPL does not provide any services to our management and has no prior relationship with us prior to its engagement by the Committee. The Committee intends to reassess the independence of FPL or any other compensation consultant retained by the Committee at least annually.
Elements of Executive Officer Compensation
In addition to its determination of the Named Executives’ individual performance levels for fiscal 2018, the Committee compared the Named Executives’ total compensation for fiscal 2018 to that of similarly-situated personnel of other comparably sized REITs as noted in the report provided by FPL. Furthermore, the Committee compared the Named Executives’ total compensation for 2018 to that within the REIT industry in the Survey described above. For fiscal 2018, our total compensation fell within the lowest range (25th percentile) within the REIT industry for REITS with comparable data in the Survey described above.
Our executive compensation structure includes the following objectives and core features:
Base Salaries
Base salaries are the principal fixed component of a Named Executive Officer’s compensation and are paid for performance of ongoing day-to-day job responsibilities throughout the year. In order to compete for and retain talented executives who are critical to our long-term success, the Committee has determined that the base salaries of Named Executive Officers should approximate those of executives of other equity REITs that compete with us for employees, investors and business, while also taking into account the Named Executive Officers’ performance and tenure, and our performance relative to the performance reported for companies in the industrial property sector, entities with total market capitalization between $1.5 billion and $3.0 billion and entities with less than 75 full-time employees within the REIT industry in the Survey described above.
Bonuses
Performance-based Cash Bonus Awards
In addition to the provisions for base salaries under the terms of their employment agreements and discretionary cash bonuses awarded by the Committee in recognition of individual accomplishments and achievements, the Chairman of the Board and the President and Chief Executive Officer are entitled to receive annual cash bonuses for each year during the terms of each respective employment agreement provided certain performance goals set by the Committee as described below are achieved.
For the Chairman of the Board:
Growth in market cap | 7.5 | % | 12.5 | % | 20 | % | ||||||
Bonus | $ | 20,000 | $ | 45,000 | $ | 90,000 | ||||||
Growth in FFO/share | 7.5 | % | 12.5 | % | 20 | % | ||||||
Bonus | $ | 20,000 | $ | 45,000 | $ | 90,000 | ||||||
Growth in dividend/share | 5 | % | 10 | % | 15 | % | ||||||
Bonus | $ | 30,000 | $ | 60,000 | $ | 120,000 | ||||||
Maximum Bonus Potential | $ | 300,000 |
For the President and Chief Executive Officer:
Growth in market cap | 10 | % | 15 | % | 20 | % | ||||||||||
Bonus | $ | 40,000 | $ | 60,000 | $ | 80,000 | ||||||||||
Growth in AFFO/share | 5 | % | 10 | % | 15 | % | 20 | % | ||||||||
Bonus (1) | $ | 50,000 | $ | 75,000 | $ | 100,000 | $ | 150,000 | ||||||||
Growth in dividend/share | 5 | % | 10 | % | 15 | % | ||||||||||
Bonus | $ | 150,000 | $ | 200,000 | $ | 250,000 | ||||||||||
Maximum Bonus Potential | $ | 480,000 | ||||||||||||||
Our Chairman of the Board earned a $95,000 cash bonus for fiscal 2018 based on our growth in market cap, growth in FFO/share and growth in dividend/share, and our President and Chief Executive Officer earned a $290,000 cash bonus for fiscal 2018 based on our growth in market cap, growth in AFFO/share and growth in dividend/share.
Discretionary Cash Bonus Awards
The Committee considers discretionary cash bonuses for the Chairman of the Board and the President and Chief Executive Officer annually. Discretionary cash bonuses awarded to the other Named Executive Officers are based on recommendations made annually by the Chairman of the Board and the President and Chief Executive Officer, which are then considered and approved by the Committee in its discretion. The Committee believes that short-term rewards in the form of discretionary cash bonuses to senior executives generally should reflect short-term results and should take into consideration both the profitability and our performance and the performance of the individual, which may include comparing such individual’s performance to that in the preceding year, reviewing the breadth and nature of the senior executive’s responsibilities and valuing special contributions by each such individual. In evaluating our performance annually, for purposes of discretionary cash bonuses, the Committee considers a variety of factors, including, among others, Funds From Operations (FFO), Adjusted Funds From Operations (AFFO), net income, growth in asset size, amount of space under lease and total return to shareholders. We consider FFO to be an important measure of an equity REIT’s operating performance and have adopted the definition suggested by NAREIT, which defines FFO to mean net income computedRegulation 14A, in accordance with U.S. GAAP, excluding gains or losses from sales of property, plus real estate related depreciation and amortization. We define AFFO as FFO plus acquisition costs and costs associated with the Redemption of Preferred Stock less recurring capital expenditures and excluding the following: lease termination income, gains or losses on securities transactions, stock-based compensation expense, amortization of financing and leasing commission costs, depreciation of corporate office tenant improvements, straight-line rent adjustments and non-recurring other expense. We consider FFO and AFFOGeneral Instruction G(3) to be meaningful additional measures of operating performance, primarily because they exclude the assumption that the value of our real estate assets diminishes predictably over time and because industry analysts have accepted these as performance measures.Form 10-K.
Other factors considered include the employee’s title and years of service. The employee’s title generally reflects the employee’s responsibilities and the employee’s years of service may be considered in determining the level of discretionary cash bonus in comparison to base salary. The Committee has declined in the past to use specific performance formulas with respect to the cash bonuses awarded to the other Named Executive Officers, believing that with respect to our performance, such formulas do not adequately account for many factors, including, among others, our relative performance compared to our competitors during variations in the economic cycle, and that with respect to individual performance, such formulas are not a substitute for the subjective evaluation by the Committee of a wide range of management and leadership skills of each of the senior executives.
In setting discretionary bonuses for fiscal 2018, the Committee considered the performance of the Chairman of the Board and the President and Chief Executive Officer and received the recommendations from the Chairman of the Board and the President and Chief Executive Officer for the discretionary cash bonuses to be awarded to the other Named Executive Officers. The Committee also considered management’s report on our progress toward our fiscal 2018 achievements in financial performance and strategic growth, and the role of each Named Executive Officer in delivering these achievements:
Financial Performance
Strategic Growth
*AFFO is a non-GAAP performance measure. See Financial Information on page 31 for a discussion of our non-GAAP performance measures.
After considering our progress towards our fiscal 2018 financial performance and strategic growth achievements, as outlined above, as well as the individual performance of the Chairman of the Board, the President and Chief Executive Officer and the other Named Executive Officers, and the recommendations of the Chairman of the Board and the President and Chief Executive Officer as to the other Named Executive Officers, the Committee established the individual discretionary cash bonuses for the Named Executive Officers based on our overall performance and the Named Executive Officers’ individual contributions to these accomplishments. Other factors considered in determining individual bonus amounts included the Named Executive Officers’ responsibilities and years of service. During fiscal 2018, the Chairman of the Board received a discretionary cash bonus of $95,615, the President and Chief Executive Officer received a discretionary cash bonus of $160,577, the Chief Financial and Accounting Officer received a discretionary cash bonus of $141,250 and the General Counsel received a discretionary cash bonus of $92,500.
Long-Term Equity Incentive Compensation
In part based on market-based compensation data and information on industry trends and best practices received from FPL, the Committee is considering providing for a greater percentage of total compensation for our Named Executive Officers to be paid in the form of performance-based equity and is exploring the possibility of developing a long-term performance-based equity compensation plan. All grants of equity will be made pursuant to our Amended and Restated 2007 Incentive Award Plan, which was approved by our shareholders on May 18, 2017.
Stock Options and Restricted Stock
The employment agreement for the Chairman of the Board states that he will receive options to purchase 65,000 shares of stock annually. The employment agreement for the President and Chief Executive Officer states that he will be entitled to equity awards of up to 25,000 shares of restricted stock each year based on achievement of performance objectives as determined by the Committee including, but not limited to, AFFO per share growth, acquisitions and total return performance. In addition, the Committee has the discretion to make additional awards of stock options and restricted stock for outstanding performance.
For the other Named Executive Officers, the Chairman of the Board and the President and Chief Executive Officer make a recommendation to the Committee for specific stock options or restricted stock grants. In making its decisions, the Committee does not use an established formula or focus on a specific performance target. The Committee recognizes that often outside forces beyond the control of management, such as economic conditions, changing leasing and real estate markets and other factors, may contribute to less favorable near-term results even when sound strategic decisions have been made by the senior executives to position Monmouth for longer term profitability. Thus, the Committee also attempts to identify whether the senior executives are exercising the kind of judgment and making the types of decisions that will lead to future growth and enhanced asset value, even if the same are difficult to measure on a current basis. For example, in determining appropriate stock option and restricted stock awards, the Committee considers, among other matters, whether the senior executives have executed strategies that will provide adequate funding or appropriate borrowing capacity for future growth, whether acquisition and leasing strategies have been developed to ensure a future stream of reliable and increasing revenues for Monmouth, whether the selection of properties, tenants and tenant mix evidence appropriate risk management, including risks associated with real estate markets and tenant credit, and whether the administration of staff size and compensation appropriately balances our current and projected operating requirements with the need to effectively control overhead costs, while continuing to grow the enterprise. Other than the equity awards required to be paid to our Chairman of the Board and the President and Chief Executive Officer pursuant to their employment agreement and amounts awarded to Named Executive Officers who are also directors as part of our Director Compensation Plan, no equity awards were made to Named Executive Officers during fiscal 2018.
Other Personal Benefits
Our employment agreements provide the Named Executive Officers with other personal benefits that we and the Committee believe are reasonable and consistent with its overall compensation program to better enable us to attract and retain superior employees for key positions. The Committee periodically reviews the levels of other personal benefits provided to the Named Executive Officers.
The Named Executive Officers are provided the following benefits under the terms of their employment agreements: an allotted number of paid vacation weeks; eligibility for the executive, as well as spouse and dependents where applicable, in all our sponsored employee benefits plans, including 401(k) plan, group health, accident, and life insurance, on terms no less favorable than applicable to any other executive; and supplemental disability insurance, at our cost. Attributed costs of the personal benefits described above for the Named Executive Officers for the fiscal year ended September 30, 2018, are included in “All Other Compensation” of the Summary Compensation Table provided below under Item 11 of this report.
Payments upon Termination or Change in Control
In addition, the Named Executive Officers’ employment agreements each contain provisions relating to change in control events. The employment agreements also contain severance or continuation of salary payments upon any termination of the Named Executive Officers’ employment, except in the case of Mr. Miller or Ms. Nagelberg, whose severance payments are only upon a termination other than for cause (as defined under the terms of the employment agreements). These change in control and severance terms have been deemed reasonable by the Compensation Committee based on the tenure and performance of each Named Executive Officer. Information regarding these provisions is included in “Employment Agreements” provided below in this Annual Report. There are no other agreements or arrangements governing change in control payments.
Evaluation
In evaluating Mr. Eugene W. Landy’s and Mr. Michael P. Landy’s eligibility for annual cash bonuses, the Committee used the bonus schedule included in their respective Amended Employment Agreements as a guide and, in considering discretionary cash bonuses for all Named Executive Officers, considered the factors detailed above under the heading “Bonuses.”
The Committee also reviewed the progress made by Mr. Michael P. Landy, President and Chief Executive Officer, as well as his contributions toward the progress that we had made that enabled us to reach the milestones discussed under “Bonuses” above. Mr. Landy is employed under an employment agreement with us. His base compensation under this contract was increased effective October 1, 2016 to $750,000 and will increase by 5% each year through fiscal 2021. The amended employment agreement has an initial term of five years and is renewed automatically for a new five-year term on the first day of each calendar quarter after the effective date unless otherwise terminated, and contains provisions for continuation of salary payments through the expiration of the term of the agreement upon any termination of Mr. Landy’s employment. Upon execution of the amended employment agreement in January 2016, Mr. Landy received a cash signing bonus of $400,000 in recognition of the substantial progress that we have made under his leadership. During 2016, when considering the new employment agreement and signing bonus, the Compensation Committee took into account the transformative changes that Company has enjoyed over the past several years, which include the Company’s total market capitalization growing more than three-fold since fiscal 2010, and the company’s total assets nearly tripling as well since that time, while the Company’s general and administrative expenses only doubled over this period. Since fiscal 2010 through fiscal 2018, our total market capitalization has grown by approximately 5.0x and our total assets have grown by approximately 4.0x, while our G&A expenses increased by only 2.3x over this period.
All Named Executive Officers were awarded their respective compensation based on their respective Employment Agreements and the many contributions that they have made towards our progress, as further detailed above, under the heading “Bonuses”. The Committee also considered the recommendations of the Chairman of the Board and the President and Chief Executive Officer concerning the other Named Executive Officers’ annual salaries, bonuses, and fringe benefits.
Clawback Policy
In October 2017, the Committee adopted a clawback policy that provides that in the event of a material restatement of our financial results, other than a restatement caused by a change in applicable accounting rules or interpretations, the Committee will review the performance-based compensation of our Named Executive Officers, as defined in our Proxy Statement from year to year, for the three years prior to such material restatement. If the Committee determines that the amount of any performance-based compensation actually paid or awarded to a Named Executive Officer (Awarded Compensation) would have been lower if it had been calculated based on such restated financial statements (Actual Compensation) and that such executive officer engaged in actual fraud or willful unlawful misconduct that materially contributed to the need for the restatement, then the Committee may direct us to recoup the after-tax portion of the difference between the Awarded Compensation and the Actual Compensation for the Named Executive Officers. The Committee has absolute discretion to administer and interpret this policy in our best interests.
Ownership Guidelines
In order to encourage our directors and Named Executive Officers to retain investments in us and help further align their interests with the interests of our stockholders, the Committee has adopted stock ownership guidelines applicable to our directors, our Chief Executive Officer and our other Named Executive Officers, recommending that they hold the following amounts of our stock:
For purposes of determining compliance with these ownership guidelines (other than the holding period for vested equity compensation), the value of each director’s or officer’s stock holdings will be calculated based on the closing price of a share of our common stock on the last trading day of our fiscal year, which was $16.72 on September 28, 2018. Shares owned by a director or officer include: shares owned outright by the director or officer or by his or her immediate family members residing in the same household; shares held in trust or under a similar arrangement for the economic benefit of the director or officer; restricted or unrestricted stock issued as part of the director or officer’s compensation, whether or not vested; shares acquired upon option exercise that the director or executive officer continues to own; and shares held for the director or executive officer’s account in a 401(k) or other retirement plan.
Our Chief Executive Officer Stock Ownership Policy was adopted in September 2015. As of September 30, 2018, Mr. Michael P. Landy, our President and Chief Executive Officer, owned stock valued at more than 13x his base salary and which is also approximately 2.0x our CEO stock ownership requirement. Our Director Stock Ownership policy was adopted effective September 12, 2017, and our other stock ownership policies were adopted effective October 1, 2017.
The aggregate stock ownership of our directors and officers represent approximately 4.5% of our outstanding common stock, which currently represents the third largest block of shareholders behind two institutional investors and helps align our management’s interests with our shareholders’ interests.
Compensation Committee Report
The Compensation Committee of our Board of Directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this report.
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Summary Compensation Table
The following Summary Compensation Table shows compensation paid or accrued by us for services rendered during the fiscal years ended September 30, 2018, 2017, and 2016 to the Named Executive Officers. There were no other executive officers whose aggregate compensation exceeded $100,000 during fiscal 2018.
Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($) (4) | Option Awards ($) (5) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value And Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||||
Eugene W. Landy | 2018 | $ | 430,500 | $ | 95,615 | $ | 4,823 | $ | 119,600 | $ | 95,000 | $ | 11,043 | (1) | $ | 68,500 | (2) | $ | 825,081 | |||||||||||||||||
Chairman of the Board | 2017 | 430,500 | 66,558 | 17,130 | 104,650 | 90,000 | 13,929 | (1) | 58,750 | 781,517 | ||||||||||||||||||||||||||
2016 | 425,375 | 65,769 | 545,600 | 48,100 | 210,000 | 16,601 | (1) | 49,500 | 1,360,945 | |||||||||||||||||||||||||||
Michael P. Landy | 2018 | $ | 787,500 | $ | 160,577 | $ | 210,698 | $ | -0- | $ | 290,000 | $ | -0- | $ | 83,080 | (3) | $ | 1,531,855 | ||||||||||||||||||
President and Chief | 2017 | 750,000 | 105,000 | 17,130 | -0- | 130,000 | -0- | 73,130 | 1,075,260 | |||||||||||||||||||||||||||
Executive Officer | 2016 | 551,250 | 501,202 | -0- | -0- | 135,000 | -0- | 63,100 | 1,250,552 | |||||||||||||||||||||||||||
Kevin S. Miller | 2018 | $ | 392,538 | $ | 141,250 | $ | 4,823 | $ | -0- | $ | -0- | $ | -0- | $ | 81,316 | (6) | $ | 619,927 | ||||||||||||||||||
Chief Financial and | 2017 | 373,846 | 81,000 | 17,130 | 58,000 | -0- | -0- | 28,616 | 558,592 | |||||||||||||||||||||||||||
Accounting Officer | 2016 | 330,637 | 74,329 | -0- | -0- | -0- | -0- | 10,600 | 415,566 | |||||||||||||||||||||||||||
Allison Nagelberg | 2018 | $ | 372,094 | $ | 92,500 | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | 10,800 | (7) | $ | 475,394 | ||||||||||||||||||
General Counsel | 2017 | 354,375 | 63,125 | -0- | 43,500 | -0- | -0- | 10,600 | 471,600 | |||||||||||||||||||||||||||
2016 | 337,188 | 62,500 | -0- | -0- | -0- | -0- | 10,600 | 410,288 |
Notes:
CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of our CEO, Mr. Michael P. Landy:
For Fiscal 2018:
Based on this information, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all other employees was 7.6 to 1.
This pay ratio is a reasonable estimate calculated in a manner consistent with the SEC rules based on our payroll and employment records and the methodology described below. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Pay ratios within our industry will also differ and may not be comparable depending on the size, scope, global breadth and structure of the company.
To identify the median employee of the annual total compensation of all our employees, as well as to determine the annual total compensation of the “median employee,” the methodology and the material assumptions, adjustments and estimates that we used were as follows:
Equity Compensation Plan Information
At our Annual Meeting held on May 18, 2017, our common shareholders approved our Amended and Restated 2007 Incentive Award Plan (the Plan) which extended the term of our 2007 Incentive Award Plan for an additional 10 years, until March 13, 2027, added 1,600,000 shares of common stock to the share reserve, expanded the types of awards available for grant under the Plan and made other improvements to the 2007 Plan.
Options to purchase 65,000 shares were granted in fiscal 2018 and options to purchase 40,000 shares were exercised during fiscal 2018. In addition, during fiscal 2018, 12,500 shares of restricted common stock and 3,670 shares of unrestricted common stock were granted. As of September 30, 2018, the number of shares remaining for future grant under the Plan is 1,671,872.
The Committee, in its capacity as Plan Administrator shall determine, among other things: the recipients of awards; the type and number of awards participants will receive; the terms, conditions and forms of the awards; the times and conditions subject to which awards may be exercised or become vested, deliverable or exercisable, or as to which any restrictions may apply or lapse; and may amend or modify the terms and conditions of an award, except that repricing of options or Stock Appreciation Rights (SAR) is not permitted without shareholder approval.
No participant may receive awards during any calendar year covering more than 200,000 shares of common stock or more than $1,500,000 in cash. Regular annual awards granted to non-employee directors as compensation for services as non-employee directors, during any of our fiscal years, may not exceed $100,000 in value of the date of grant, and the grant date value of any special or one-time award upon election or appointment to the Board of Directors may not exceed $200,000.
Awards granted pursuant to the Plan generally may not vest until the first anniversary of the date the award was granted, provided, however, that up to 5% of the Common Shares available under the Plan may be awarded to any one or more Eligible Individuals without the minimum vesting period.
If an award made under the Plan is forfeited, expires or is converted into shares of another entity in connection with a recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares or other similar event, or the award is settled in cash, the shares associated with the forfeited, expired, converted or settled award will become available for additional awards under the Plan.
The term of any stock option or SAR generally may not be more than 10 years from the date of grant. The exercise price per common share under the Plan generally may not be below 100% of the fair market value of a common share at the date of grant.
Grants of Plan-Based Awards
All restricted stock awards granted during fiscal year 2018 vest 1/5th per year over a five year period and all dividends paid on unvested shares are reinvested in additional shares of restricted stock subject to the same vesting schedule. The following table sets forth, for the executive officers named in the Summary Compensation Table, information regarding individual grants of restricted stock and individual grants of stock options made under the Plan during the fiscal year ended September 30, 2018:
Name | Grant Date | All Other Stock Awards; Number of Shares of Restricted Stock (1) | All Other Stock Awards; Number of Shares of Unrestricted Stock (2) | All Other Option Awards; Number of Shares Underlying Options (3) | Exercise Price of Option Award or Fair Value Per Share at Grant Date of Stock Award | Grant Date FairValue | ||||||||||||||||
Eugene W. Landy | 1/3/18 | -0- | -0- | 65,000 | $ | 17.80 | $ | 119,600 | (4) | |||||||||||||
Eugene W. Landy | 1/16/18 | -0- | 71 | -0- | $ | 17.05 | $ | 1,211 | ||||||||||||||
Eugene W. Landy | 3/27/18 | -0- | 82 | -0- | $ | 14.64 | $ | 1,200 | ||||||||||||||
Eugene W. Landy | 6/19/18 | -0- | 77 | -0- | $ | 15.59 | $ | 1,200 | ||||||||||||||
Eugene W. Landy | 9/13/18 | -0- | 70 | -0- | $ | 17.31 | $ | 1,212 | ||||||||||||||
Michael P. Landy | 10/3/17 | 12,500 | -0- | -0- | $ | 16.47 | $ | 205,875 | ||||||||||||||
Michael P. Landy | 1/16/18 | -0- | 71 | -0- | $ | 17.05 | $ | 1,211 | ||||||||||||||
Michael P. Landy | 3/27/18 | -0- | 82 | -0- | $ | 14.64 | $ | 1,200 | ||||||||||||||
Michael P. Landy | 6/19/18 | -0- | 77 | -0- | $ | 15.59 | $ | 1,200 | ||||||||||||||
Michael P. Landy | 9/13/18 | -0- | 70 | -0- | $ | 17.31 | $ | 1,212 | ||||||||||||||
Kevin S. Miller | 1/16/18 | -0- | 71 | -0- | $ | 17.05 | $ | 1,211 | ||||||||||||||
Kevin S. Miller | 3/27/18 | -0- | 82 | -0- | $ | 14.64 | $ | 1,200 | ||||||||||||||
Kevin S. Miller | 6/19/18 | -0- | 77 | -0- | $ | 15.59 | $ | 1,200 | ||||||||||||||
Kevin S. Miller | 9/13/18 | -0- | 70 | -0- | $ | 17.31 | $ | 1,212 |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Our executive compensation policies and practices, pursuant to which the compensation set forth in the Summary Compensation Table and the Grants of Plan-Based Awards Table was paid or awarded to our Named Executive Officers, are described above under “Compensation Discussion and Analysis” and below under “Employment Agreements.”
Option Exercises and Stock Vested
The following table sets forth summary information concerning options exercised and vesting of stock awards for each of the Named Executive Officers during the fiscal year ended September 30, 2018:
Fiscal Year Ended September 30, 2018 | ||||||||||||||||
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise (1) ($) | Number of Shares Acquired on Vesting (#) | Value realized on Vesting ($) | ||||||||||||
Eugene W. Landy | -0- | -0- | 10,578 | $ | 181,082 | (2) | ||||||||||
Michael P. Landy | -0- | -0- | 4,230 | 71,122 | (3) | |||||||||||
Kevin S. Miller | -0- | -0- | 7,960 | 133,818 | (4) | |||||||||||
Allison Nagelberg | -0- | -0- | 1,165 | 19,607 | (5) |
Outstanding Equity Awards at Fiscal Year End
The following table sets forth for the executive officers named in the Summary Compensation Table, information regarding stock options and restricted stock outstanding at September 30, 2018:
Fiscal Year Ended September 30, 2018 | ||||||||||||||||||||||||
Option Awards | Restricted Stock Awards | |||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option exercise price ($) | Option expiration date | Number of Shares That Have Not Vested | Market Value Of Shares that Have Not Vested (2) | ||||||||||||||||||
Eugene W. Landy | 30,055 | (3) | $ | 502,514 | ||||||||||||||||||||
-0- | 65,000 | (1) | $ | 17.80 | 01/03/26 | |||||||||||||||||||
65,000 | -0- | 15.04 | 01/04/25 | |||||||||||||||||||||
65,000 | -0- | 10.37 | 01/05/24 | |||||||||||||||||||||
65,000 | -0- | 11.16 | 01/05/23 | |||||||||||||||||||||
65,000 | -0- | 8.94 | 01/03/22 | |||||||||||||||||||||
65,000 | -0- | 10.46 | 01/03/21 | |||||||||||||||||||||
65,000 | -0- | 9.33 | 01/03/20 | |||||||||||||||||||||
65,000 | -0- | 8.72 | 01/03/19 | |||||||||||||||||||||
Michael P. Landy | -0- | -0- | $ | -0- | - | 21,430 | (4) | $ | 358,309 | |||||||||||||||
Kevin S. Miller | 40,000 | -0- | $ | 14.24 | 12/09/24 | 8,047 | (5) | $ | 134,553 | |||||||||||||||
Allison Nagelberg | 30,000 | -0- | $ | 14.24 | 12/09/24 | 2,354 | (6) | $ | 39,363 |
Employment Agreements
Eugene W. Landy, our Chairman of the Board, executed an Employment Agreement on December 9, 1994, which was amended on June 26, 1997 (First Amendment), on November 5, 2003 (Second Amendment), on April 1, 2008 (Third Amendment), on July 1, 2010 (Fourth Amendment), on April 25, 2013 (Fifth Amendment), on December 20, 2013 (Sixth Amendment), on December 18, 2014 (Seventh Amendment) and on January 12, 2016 (Eighth Amendment) – collectively, the “Amended Employment Agreement”. Pursuant to the Amended Employment Agreement, Mr. Eugene Landy’s base salary was $410,000 per year, effective January 1, 2015, and was increased pursuant to the Eighth Amendment to $430,500 per year, effective January 1, 2016. He is entitled to receive pension payments of $50,000 per year through 2020; in fiscal 2018, we accrued $11,043 in additional compensation expense related to the pension benefits. Mr. Eugene Landy’s incentive bonus schedule is detailed in the Fourth Amendment and is based on progress toward achieving certain target levels of growth in market capitalization, funds from operations and dividends per share. Pursuant to the Amended Employment Agreement, Mr. Eugene Landy will receive each year an option to purchase 65,000 Common Shares. Mr. Eugene Landy is entitled to five weeks paid vacation annually, and he is entitled to participate in our employee benefit plans.
The Amended Employment Agreement provides for aggregate severance payments of $500,000, payable to Mr. Eugene Landy upon the termination of his employment for any reason in increments of $100,000 per year for five years. He is entitled to disability payments in the event of his disability (as defined in the Amended Employment Agreement) for a period of three years equal to his base salary. The Amended Employment Agreement provides for a death benefit of $500,000, payable to Mr. Eugene Landy’s designated beneficiary. Upon the termination of Mr. Eugene Landy’s employment, following, or as a result of, certain types of transactions that lead to a significant increase in our market capitalization, the Amended Employment Agreement provides that Mr. Eugene Landy will receive a grant of 35,000 to 65,000 Common Shares, depending on the amount of the increase in our market capitalization, all of his outstanding options to purchase Common Shares will become immediately vested, and he will be entitled to continue to receive benefits under our health insurance and similar plans for one year. In the event of a change in control, Mr. Eugene Landy shall receive a lump sum payment of $2,500,000, provided that the sale price is at least $10 per share of common stock. A change of control is defined as the consummation of a reorganization, merger, share exchange, consolidation, or sale or disposition of all or substantially all of our assets. This change of control provision will not apply to any combination between us and UMH. Payment will be made simultaneously with the closing of the transaction, and only in the event that the transaction closes. The Amended Employment Agreement is terminable by our Board of Directors at any time by reason of Mr. Eugene Landy’s death or disability or for cause, which is defined in the Amended Employment Agreement as a termination of the agreement if our Board of Directors determines in good faith that Mr. Eugene Landy failed to substantially perform his duties to us (other than due to his death or disability), or has engaged in conduct the consequences of which are materially adverse to us, monetarily or otherwise. Upon termination of the Amended Employment Agreement, Mr. Eugene Landy will remain entitled to the disability, severance, death and pension benefits provided for in the Amended Employment Agreement.
Effective April 9, 2013, Michael P. Landy was appointed President and Chief Executive Officer. Prior to April 9, 2013, Mr. Michael Landy was the Chief Operating Officer. Effective October 1, 2013, Michael Landy entered into a three-year employment agreement with us, under which Mr. Michael Landy received an annual base salary of $500,000 for fiscal year 2014 with increases of 5% for each of fiscal years 2015 and 2016, plus bonuses and customary fringe benefits. On January 11, 2016, we entered into an amended and restated Employment Agreement (Employment Agreement) with Mr. Michael Landy, which became effective October 1, 2016. Upon signing the Employment Agreement, Mr. Michael Landy received a signing bonus of $400,000 in recognition of the substantial progress that we have made under his leadership. Effective October 1, 2016, Mr. Michael Landy receives an annual base salary of $750,000 for fiscal year 2017 with increases of 5% for each of fiscal years 2018, 2019, 2020 and 2021, plus targeted bonuses and customary fringe benefits. The Employment Agreement has an initial term of five years, and is renewed automatically for a new five-year term on the first day of each calendar quarter after the effective date unless otherwise terminated. For fiscal years after 2021, Mr. Michael Landy’s base salary shall be set by the Compensation Committee of our Board of Directors but will be no less than his base salary for the preceding year. Mr. Michael Landy will receive annual cash bonuses based on our achievement of certain performance objectives as determined by the Compensation Committee: a) Growth in Market Cap of 10%, 15% or 20%, Mr. Michael Landy will receive $40,000, $60,000 or $80,000, respectively; b) Growth in AFFO per share of 5%, 10%, 15%, or 20%, Mr. Michael Landy will receive $50,000, $75,000, $100,000 or $150,000, respectively; and c) Growth in Dividend per Share of 5%, 10% or 15%, Mr. Michael Landy will receive $150,000, $200,000 or $250,000, respectively. Mr. Michael Landy will also be entitled to equity awards of up to 25,000 shares of restricted stock each year based on achievement of performance objectives as determined by the Compensation Committee. Mr. Michael Landy also receives four weeks’ vacation annually and he is entitled to customary fringe benefits including life insurance, health benefits and the right to participate in our 401(k) retirement plan. We reimburse Mr. Michael Landy for the cost of a disability insurance policy such that, in the event of Mr. Michael Landy’s disability for a period of more than 90 days, Mr. Michael Landy will receive benefits up to 60% of his then-current salary. Under the Employment Agreement, if Mr. Michael Landy’s employment is terminated for any reason, either voluntarily or involuntarily, including the death of Mr. Michael Landy or termination for cause, Mr. Michael Landy shall be entitled to the base salary plus base target bonuses due under the Employment Agreement for the remaining term of the Employment Agreement (as it has been renewed). The Employment Agreement also provides that, upon a change of control (as defined below), the Employment Agreement will automatically renew for five years from the date of the change in control and Mr. Michael Landy shall have the right to terminate the Employment Agreement and continue to receive the base salary plus base target bonuses and restricted stock awards he would have been entitled to receive during the remaining term of the Employment Agreement. In addition, provided that Mr. Michael Landy is actively employed by us as of the consummation of a change of control, Mr. Michael Landy shall be entitled to a transaction bonus consistent with the terms of any applicable transaction bonus plan that we may adopt. The term “Change of Control” under Mr. Michael Landy’s amended employment agreement means (i) a sale of substantially all of our assets, not in the ordinary course, to an unaffiliated third party, (ii) the transfer, in one transaction or a series of transactions, to an unaffiliated third party, of outstanding shares of our capital stock representing a majority of the then outstanding voting stock, (iii) a majority of our Directors ceasing to be individuals who either were members of the Board immediately following our 2014 Annual Meeting of Shareholders, or whose election as a director was approved by a majority of such incumbent directors or their approved successors, (iv) a merger or consolidation having the same effect as item (i), (ii) or (iii) above or (iv) any other event of a nature that would be required to be reported as a change of control in item 5.01 of Form 8-K under the Securities Exchange Act of 1934, as amended (or any successor provision thereto).
Effective January 1, 2016, Kevin S. Miller entered into a new three-year employment agreement with us, under which Mr. Miller will receive an annual base salary of $360,000 for calendar year 2016 with increases of 5% for each of calendar years 2017 and 2018, plus bonuses and customary fringe benefits. Mr. Miller also receives four weeks’ vacation, annually. We reimburse Mr. Miller for the cost of a disability insurance policy such that, in the event of Mr. Miller’s disability for a period of more than 90 days, Mr. Miller will receive benefits up to 60% of his then-current salary. In the event of a merger, sale or change of voting control, excluding transactions between us and UMH, Mr. Miller will have the right to extend and renew the employment agreement so that the expiration date will be three years from the date of merger, sale or change of voting control, or Mr. Miller may terminate the employment agreement and be entitled to receive the greater of the base salary due under the remaining term of the agreement or one year’s base salary at the date of termination, paid monthly over the remaining term or life of the agreement. If there is a termination of employment by us or by Mr. Miller for any reason, either involuntary or voluntary, including the death of the employee, other than a termination for cause as defined by the agreement, Mr. Miller shall be entitled to the greater of the base salary due under the remaining term of the agreement or one year’s base salary at the date of termination, paid monthly over the remaining term or life of the agreement.
Effective January 1, 2017, Ms. Allison Nagelberg entered into a new three-year employment agreement with us, under which Ms. Nagelberg receives an annual base salary of $358,313 for calendar year 2017, with increases of 5% for each of calendar years 2018 and 2019, plus bonuses and customary fringe benefits. Under the employment agreement, Ms. Nagelberg receives four weeks’ vacation, annually. We reimburse Ms. Nagelberg for the cost of a disability insurance policy such that, in the event of Ms. Nagelberg’s disability for a period of more than 90 days, Ms. Nagelberg will receive benefits up to 60% of her then-current salary. In the event of a merger, sale or change of voting control, excluding transactions between us and UMH, Ms. Nagelberg will have the right to extend and renew this employment agreement so that the expiration date will be three years from the date of merger, sale or change of voting control, or Ms. Nagelberg may terminate the employment agreement and be entitled to receive one year’s compensation in accordance with the agreement. If there is a termination of employment by us or Ms. Nagelberg for any reason, either involuntary or voluntary, including the death of the employee, other than a termination for cause as defined by the agreement, Ms. Nagelberg shall be entitled to the greater of the base salary due under the remaining term of the agreement or one year’s compensation at the date of termination, paid monthly over the remaining term or life of the agreement.
Potential Payments upon Termination of Employment or Change-in-Control
Under the employment agreements with our President and Chief Executive Officer and the other Named Executive Officers listed below, our President and Chief Executive Officer and such other Named Executive Officers are entitled to receive the following estimated payments and benefits upon a termination of employment or voluntary resignation (with or without a change-in-control). These disclosed amounts are estimates only and do not necessarily reflect the actual amounts that would be paid to the Named Executive Officers, which would only be known at the time that they become eligible for payment and would only be payable if a termination of employment, or voluntary resignation, were to occur. The table below reflects the amount that could be payable under the various arrangements assuming that the termination of employment had occurred at September 30, 2018. Each of the employees named in the table below have restricted stock awards and/or stock option awards which are listed in the “Outstanding Equity Awards at Fiscal Year End” table previously disclosed. Restricted Stock Awards vest upon the termination of an employee due to death or disability. In addition, restricted stock awards vest on the date of an involuntary termination of employment or if the employee retires. If the termination of employment is for any other reason, including voluntary resignation, termination not for cause or good reason resignation, termination for cause, or termination not for cause or good reason (after a change in control), the restricted stock awards are forfeited. Regarding the stock option awards, if the termination is for any reason other than a termination for cause, the stock option awards may be exercised until three months after the termination of employment. If the termination is for cause, the stock option awards are forfeited.
Voluntary Resignation on 9/30/18 | Termination Not for Cause Or Good Reason Resignation on 9/30/18 | Termination For Cause on 9/30/18 | Termination Not for Cause or Good Reason Resignation (After a Change-in-Control) on 9/30/18 | Disability/ Death on 9/30/18 | ||||||||||||||||
Eugene W. Landy | $530,110 | (3) | $530,110 | (3) | $508,279 | (2) | $3,030,110 | (4) | $1,821,610 | (5) | ||||||||||
Michael P. Landy | 4,429,983 | (6) | 4,429,983 | (6) | 4,429,983 | (6) | 4,429,983 | (6) | 4,429,983 | (6) | ||||||||||
Kevin S. Miller | 396,900 | (7) | 396,900 | (7) | 7,633 | (1) | 396,900 | (7) | 396,900 | (7) | ||||||||||
Allison Nagelberg | 489,097 | (8) | 489,097 | (8) | 7,235 | (1) | 489,097 | (8) | 489,097 | (8) |
Compensation Risk
The Compensation Committee has assessed our compensation program for the purpose of viewing and considering any risks presented by our compensation policies and practices that are likely to have a material adverse effect on us. As part of that assessment, we reviewed the primary elements of our compensation program, including base salary, annual bonus opportunities, equity compensation and severance arrangements. Our risk assessment included a review of the overall design of each primary element of our compensation program, and an analysis of the various design features, controls and approval rights in place with respect to compensation paid to management and other employees that mitigate potential risks to us that could arise from our compensation program. Following the assessment, we determined that our compensation policies and practices did not create risks that were reasonably likely to have a material adverse effect on us and reported the results of the assessment to the Compensation Committee.
Director Compensation
Effective September 12, 2017, the annual cash directors’ fee increased from $41,000 to $48,000, plus an additional amount to be paid in our unrestricted common stock valued at $4,800 for a total annual directors’ fee of $52,800. This annual directors’ fee will be paid quarterly. Effective in fiscal 2018, Directors received an increase in their meeting attendance fee from $4,000 to $5,000 for each Board meeting attended in person, and they will continue to receive $500 for each telephonic Board meeting attended. Directors appointed to Board committees will continue to receive $1,200 for each committee meeting attended.
The table below sets forth a summary of director compensation for the fiscal year ended September 30, 2018:
Annual Board Cash | Meeting | Committee | Unrestricted Stock | |||||||||||||||||
Director | Retainer | Fees | Fees | Awards (6) | Total Fees | |||||||||||||||
Kiernan Conway | $ | 12,000 | $ | 5,000 | $ | -0- | $ | 1,212 | $ | 18,212 | ||||||||||
Daniel D. Cronheim | 48,000 | 20,500 | -0- | 4,823 | 73,323 | |||||||||||||||
Catherine B. Elflein (1) | 48,000 | 20,500 | 4,800 | 4,823 | 78,123 | |||||||||||||||
Brian H. Haimm (1)(2)(3)(5) | 48,000 | 20,500 | 6,500 | 4,823 | 79,823 | |||||||||||||||
Neal Herstik | 48,000 | 20,500 | -0- | 4,823 | 73,323 | |||||||||||||||
Matthew I. Hirsch (1)(2)(3)(4) | 48,000 | 20,500 | 7,000 | 4,823 | 80,323 | |||||||||||||||
Samuel A. Landy | 48,000 | 20,500 | -0- | 4,823 | 73,323 | |||||||||||||||
Gregory T. Otto (3)(4) | 48,000 | 20,500 | 500 | 4,823 | 73,823 | |||||||||||||||
Scott L. Robinson (1) | 48,000 | 20,500 | 4,800 | 4,823 | 78,123 | |||||||||||||||
Stephen B. Wolgin (1)(4) | 48,000 | 20,500 | 7,000 | 4,823 | 80,323 | |||||||||||||||
Total | $ | 444,000 | $ | 189,500 | $ | 30,600 | $ | 44,619 | $ | 708,719 |
Mr. Eugene W. Landy, Mr. Michael P. Landy and Mr. Kevin S. Miller are Named Executive Officers. As such, their director compensation is included in the Summary Compensation Table.
Pension Benefits and Nonqualified Deferred Compensation Plans
Except as provided in the specific employment agreement for Mr. Eugene W. Landy, as described above, we do not have pension or other post-employment plans in effect for officers, directors or employees or a nonqualified deferred compensation plan. The present value of accumulated benefit of contractual pension benefits for Mr. Eugene W. Landy is $543,946 as of September 30, 2018. Payments made during the 2018 fiscal year were $50,000. He is entitled to receive pension payments of $50,000 per year through 2020. Our employees may elect to participate in our 401(k) plan, which is administered by UMH.
Other Information
Daniel D. Cronheim is one of our directors and is also an Executive Vice President of David Cronheim Company (Cronheim) and Cronheim Management Services, Inc. (CMSI). Daniel Cronheim received $73,323, $75,880 and $49,500 for director’s fees in fiscal 2018, 2017 and 2016, respectively. We have not paid any fees to The David Cronheim Mortgage Corporation, an affiliated company of CMSI, over the last three fiscal years.
Compensation Committee Interlocks and Insider Participation
As of September 30, 2018, the Compensation Committee consisted of Messrs. Haimm (Chairman), Hirsch and Otto. No member of the Compensation Committee is a current or former officer or employee of the Company. In fiscal 2018, none of our executive officers served on the compensation committee of any entity, or board of directors of any entity that did not have a compensation committee, that had one or more of its executive officers serving on our Compensation Committee. The members of the Compensation Committee did not otherwise have any relationships requiring related-party disclosure in our Annual Report.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table lists information with respectrequired by this item is incorporated herein by reference to the beneficial ownershipdefinitive proxy statement for the Company’s 2021 annual meeting of our common and preferred stock as of September 30, 2018 by:stockholders to be filed with the SEC pursuant to Regulation 14A, in accordance with General Instruction G(3) to Form 10-K.
Unless otherwise indicated, the address of the person or persons named below is c/o Monmouth Real Estate Investment Corporation, Juniper Business Plaza, 3499 Route 9 North, Suite 3-D, Freehold, New Jersey 07728. In determining the number and percentage of Shares beneficially owned by each person, Shares that may be acquired by that person under options exercisable within sixty (60) days of September 30, 2018 are deemed beneficially owned by that person and are deemed outstanding for purposes of determining the total number of outstanding Common Shares for that person and are not deemed outstanding for that purpose for all other shareholders.
Common Shares | Series C Preferred Shares | |||||||||||||||
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership (1) | Percentage of Common Shares Outstanding (2) | Amount and Nature of Beneficial Ownership (1) | Percentage of Preferred Shares Outstanding (3) | ||||||||||||
The Vanguard Group, Inc. 100 Vanguard Boulevard Malvern, PA 19355 (4) | 7,951,515 | 9.76 | % | |||||||||||||
BlackRock, Inc. 40 East 52nd Street New York, NY 10022 (5) | 7,437,398 | 9.13 | % | |||||||||||||
Wasatch Financial Advisors 505 Wakara Way, 3rd Floor Salt Lake City, UT 84108 (6) | 6,444,876 | 7.91 | % | |||||||||||||
Kiernan Conway | 70 | * | ||||||||||||||
Daniel D. Cronheim (7) | 173,563 | * | ||||||||||||||
Catherine B. Elflein (8) | 15,922 | * | ||||||||||||||
Brian H. Haimm (9) | 14,081 | * | ||||||||||||||
Neal Herstik (10) | 20,126 | * | 2,800 | * | ||||||||||||
Matthew I. Hirsch (11) | 78,736 | * | ||||||||||||||
Eugene W. Landy (12) | 2,077,224 | 2.53 | % | |||||||||||||
Michael P. Landy (13) | 638,668 | * | ||||||||||||||
Samuel A. Landy (14) | 352,241 | * | ||||||||||||||
Kevin S. Miller (15) | 84,838 | * | ||||||||||||||
Allison Nagelberg (16) | 114,098 | * | ||||||||||||||
Gregory T. Otto (17) | 905 | * | ||||||||||||||
Scott L. Robinson (18) | 8,632 | * | ||||||||||||||
Katie Rytter (19) | 29,316 | * | 370 | * | ||||||||||||
Stephen B. Wolgin (20) | 74,890 | * | 14,013 | * | ||||||||||||
Directors and Executive Officers as a group | 3,683,310 | 4.49 | % | 17,183 | * |
*Less than 1%.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
There are no family relationships between any of our directors or executive officers, except that Samuel A. Landy, a director and Michael P. Landy, President, Chief Executive Officer, and a director, are the sons of Eugene W. Landy, the Chairman of the Board and an Executive Director.
Daniel D. CronheimThe information required by this item is one of our directors and is also an Executive Vice President of David Cronheim Company (Cronheim) and Cronheim Management Services, Inc. (CMSI). Daniel Cronheim received $73,323, $75,880 and $49,500 for director’s fees in fiscal 2018, 2017 and 2016, respectively. We have not paid any fees to The David Cronheim Mortgage Corporation, an affiliated company of CMSI, over the last three fiscal years.
Five of our 13 directors are also directors and shareholders of UMH. We hold common and preferred stock of UMH in our securities portfolio. See Note 6 of the Notesincorporated herein by reference to the Consolidated Financial Statements includeddefinitive proxy statement for the Company’s 2021 annual meeting of stockholders to be filed with the SEC pursuant to Regulation 14A, in accordance with General Instruction G(3) to Form 10-K.
ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Form 10-K for current holdings. During fiscal 2018, we made total purchases of 59,905 common shares of UMH for a total cost of $828,787, or a weighted average cost of $13.84 per share, which were purchased through UMH’s Dividend Reinvestment and Stock Purchase Plan. During fiscal 2018, UMH made total purchases of 101,304 of our common shares through our DRIP for a total cost of $1,566,624, or a weighted average cost of $15.46 per share.
As of September 30, 2018, we had 14 full-time employees and one part-time employee. Our Chairman of the Boarditem is also the Chairman of the Board of UMH. Other than our Chairman of the Board, we do not share any employees with UMH.
Effective January 12, 2015, we entered into a seven-year lease agreement to occupy 5,680 square feet for our current corporate office space. Rent for our current corporate office space is at an annual rate of $99,400 or $17.50 per square foot for years one through five and an annual rate of $100,820 or $17.75 per square foot for years six and seven. We are also responsible for our proportionate share of real estate taxes and common area maintenance. Mr. Eugene W. Landy, the Founder and Chairman of the Board, owns a 24% interest in the entity that is the landlord of the property where our corporate office space is currently located. We believe that the aforesaid rent is no more than what we would pay for comparable space elsewhere.
No director, executive officer, or any immediate family member of such director or executive officer may enter into any transaction or arrangement with us without the prior approval of the Board of Directors. If any such transaction or arrangement is proposed, the Board of Directors will appoint a Business Judgment Committee consisting of independent directors who are also independent of the transaction or arrangement. This Committee will recommendincorporated herein by reference to the Boarddefinitive proxy statement for the Company’s 2021 annual meeting of Directors approval or disapproval ofstockholders to be filed with the transaction or arrangement. In determining whetherSEC pursuant to approve such a transaction or arrangement, the Business Judgment Committee will take into account, among other factors, whether the transaction was on terms no less favorableRegulation 14A, in accordance with General Instruction G(3) to us than terms generally available to third parties and the extent of the executive officer’s or director’s involvement in such transaction or arrangement. While we do not have specific written standards for approving such related party transactions, such transactions are only approved if it is in our best interest or in the best interest of our shareholders. Additionally, our Code of Business Conduct and Ethics requires all directors, officers and employees who may have a potential or apparent conflict of interest to immediately notify our General Counsel. Further, to identify related party transactions, we submit and require our directors and executive officers to complete director and officer questionnaires identifying any transactions with us in which the director, executive officer or their immediate family members have an interest.Form 10-K.
See identification and other information relating to independent directors under Item 10.
57 |
ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES
PKF O’Connor Davies, LLP served as our independent registered public accountants for the years ended September 30, 2018 and 2017. A representative from PKF O’Connor Davies, LLP is expected to be present at the annual shareholders’ meeting in order to be available to respond to possible inquiries from shareholders.
The following are fees billed by and accrued to PKF O’Connor Davies, LLP in connection with services rendered for the fiscal years ended September 30, 2018 and 2017:
2018 | 2017 | |||||||
Audit Fees | $ | 224,900 | $ | 217,000 | ||||
Audit Related Fees | 31,100 | 40,300 | ||||||
Tax Fees | 51,400 | 49,500 | ||||||
All Other Fees | -0- | -0- | ||||||
Total Fees | $ | 307,400 | $ | 306,800 |
Audit fees include professional services rendered for the audit of our annual financial statements, management’s assessment of internal controls, and reviews of financial statements included in our quarterly reports on Form 10-Q.
Audit related fees include services that are normally provided by our independent auditors in connection with statutory and regulatory filings, such as consents and assistance with and review of documents filed with the Securities and Exchange Commission.
Tax fees include professional services rendered for the preparation of our federal and state corporate tax returns and supporting schedules as may be required by the Internal Revenue Service and applicable state taxing authorities. Tax fees also include other work directly affecting or supporting the payment of taxes, including planning and research of various tax issues.
All of the services performed by PKF O’Connor Davies, LLP for us during fiscal 2018 were either expressly pre-approved by the Audit Committee or were pre-approved in accordance with the Audit Committee Pre-Approval Policy, and the Audit Committee was provided with regular updates as to the nature of such services and fees paid for such services.
Audit Committee Pre-Approval Policy
The Audit Committee has adopted a policy for the pre-approval of audit and permitted non-audit services provided by our principal independent accountants. The policy requires that all services provided by our independent registered public accountants to us, including audit services, audit-related services, tax services and other services, must be pre-approved by the Audit Committee, and all have been so approved. The pre-approval requirements do not prohibit day-to-day normal tax consulting services, which matters will not exceed $10,000 in the aggregate.
The Audit Committee has determined that the provision of the non-audit services described above is compatible with maintaining PKF O’Connor Davies, LLP’s independence.
ITEM 15 - EXHIBITS,EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
PAGE(S) | ||||
(a) | (1) | The following Financial Statements are filed as part of this report: | ||
(i) | Report of Independent Registered Public Accounting Firm | |||
(ii) | Consolidated Balance Sheets as of September 30, | |||
(iii) | 66-67 | |||
(iv) | 68 | |||
(v) | 69-70 | |||
(vi) | 71 | |||
(vii) | Notes to the Consolidated Financial Statements | |||
(a) | (2) | The following Financial Statement Schedule is filed as part of this report: | ||
(i) | Schedule III - Real Estate and Accumulated Depreciation as of September 30, |
All other schedules are omitted for the reason thatbecause they are not required, are not applicable, or the required information is set forth in the Consolidated Financial Statements or Notes hereto.
58 |
ITEM 15 - EXHIBITS,EXHIBIT AND FINANCIAL STATEMENT SCHEDULES (CONT’D)
60 |
+ |
61 |
101.INS | ++ | |
101.SCH | ++ | |
101.CAL | ++ | |
101.LAB | ++ | |
101.PRE | ++ | |
101.DEF | ++ |
* | Filed herewith. |
+ | |
Denotes a management contract or compensatory plan or arrangement. | |
++ | |
Pursuant to Rule 406T of Regulation S-T, this interactive date file is deemed not “filed” or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act, is deemed not “filed” for purposes of Section 18 of the Exchange Act, and otherwise is not subject to liability under these sections. |
62 |
Report of Independent Registered Public Accounting Firm
TheTo the Board of Directors and Shareholders of
Monmouth Real Estate Investment Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Monmouth Real Estate Investment Corporation (the “Company”) as of September 30, 20182021 and 2017,2020, and the related consolidated statements of income (loss), comprehensive income (loss), shareholders’ equity, and cash flows for each of the three years in the period ended September 30, 2018,2021, and the related notes and schedule listed in the Index at Item 15(a)(2)(i) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2018,2021, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of September 30, 2018,2021, based on criteria established inInternal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated November 28, 2018,12, 2021, expressed an unqualified opinion.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Acquisition of Real Estate Properties
As discussed in Note 3 to the consolidated financial statements, during fiscal 2021, the Company purchased four real estate properties for an aggregate purchase price of approximately $258.4 million. The Company determined that all four acquisitions are acquisitions of assets and that these property acquisitions do not meet the definition of a business. As a result, the total cash consideration for the four acquisitions were allocated to land, building and an intangible asset related to in-place leases on a relative fair value basis.
Auditing both (1) the determination that these acquisitions were asset acquisitions and (2) the relative fair value allocation of the cost of the property acquisitions to tangible and intangible assets involved a high degree of judgment, estimation and an increased extent of effort. The allocation of value to the components of properties acquired could have a material effect on the Company’s net income due to the differing depreciable and amortizable lives of each component and the classification of the related depreciation or amortization expense in the Company’s consolidated statements of income (loss).
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of management’s internal controls relating to acquisition accounting, including management’s review of third-party valuation reports, and their assessment of any intangible assets relating to in-place leases and above or below market leases. Among other audit procedures performed, (1) we evaluated the assets acquired to determine that they did not meet the definition of a business, and (2) we evaluated the appropriateness of the relative fair value allocation, including the key inputs and assumptions used by management. Our procedures included evaluating the reasonableness of the inputs and assumptions used by management and determining whether those inputs and assumptions were consistent with other evidence obtained in other areas of the audit and by considering the consistency with external market and industry data. Additionally, we recomputed the relative fair value allocation for each asset acquisition.
/s/ PKF O’Connor Davies, LLP
November 12, 2021
New York, New York
We have served as the Company’s auditor since 2008.
November 28, 2018
New York, New York
* * *
63 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES
AS OF SEPTEMBER 30,
2018 | 2017 | |||||||
ASSETS | ||||||||
Real Estate Investments: | ||||||||
Land | $ | 224,719,083 | $ | 187,224,819 | ||||
Buildings and Improvements | 1,494,859,336 | 1,244,691,715 | ||||||
Total Real Estate Investments | 1,719,578,419 | 1,431,916,534 | ||||||
Accumulated Depreciation | (207,065,634 | ) | (171,086,083 | ) | ||||
Real Estate Investments | 1,512,512,785 | 1,260,830,451 | ||||||
Real Estate Held for Sale | -0- | 14,631,633 | ||||||
Cash and Cash Equivalents | 9,324,585 | 10,226,046 | ||||||
Securities Available for Sale at Fair Value | 154,920,545 | 123,764,770 | ||||||
Tenant and Other Receivables | 1,249,434 | 1,753,054 | ||||||
Deferred Rent Receivable | 9,656,179 | 8,049,275 | ||||||
Prepaid Expenses | 6,189,796 | 5,434,874 | ||||||
Intangible Assets, net of Accumulated Amortization of $13,699,519 and $13,404,318, respectively | 14,589,756 | 10,010,165 | ||||||
Capitalized Lease Costs, net of Accumulated Amortization of $3,271,481 and $3,393,187, respectively | 5,231,845 | 4,180,907 | ||||||
Financing Costs, net of Accumulated Amortization of $995,135 and $619,555, respectively | 500,129 | 875,709 | ||||||
Other Assets | 4,202,832 | 3,280,871 | ||||||
TOTAL ASSETS | $ | 1,718,377,886 | $ | 1,443,037,755 |
(in thousands except per share amounts)
2021 | 2020 | |||||||
ASSETS | ||||||||
Real Estate Investments: | ||||||||
Land | $ | 277,846 | $ | 250,497 | ||||
Buildings and Improvements | 2,025,844 | 1,793,367 | ||||||
Total Real Estate Investments | 2,303,690 | 2,043,864 | ||||||
Accumulated Depreciation | (345,988 | ) | (296,020 | ) | ||||
Real Estate Investments | 1,957,702 | 1,747,844 | ||||||
Cash and Cash Equivalents | 48,618 | 23,517 | ||||||
Securities Available for Sale at Fair Value | 143,505 | 108,832 | ||||||
Tenant and Other Receivables | 5,083 | 5,431 | ||||||
Deferred Rent Receivable | 15,679 | 12,856 | ||||||
Prepaid Expenses | 8,502 | 7,554 | ||||||
Intangible Assets, net of Accumulated Amortization of $19,669 and $17,330, respectively | 20,959 | 16,832 | ||||||
Capitalized Lease Costs, net of Accumulated Amortization of $4,435 and $4,286, respectively | 5,719 | 5,631 | ||||||
Financing Costs, net of Accumulated Amortization of $745 and $356, respectively | 991 | 1,380 | ||||||
Other Assets | 9,125 | 9,906 | ||||||
TOTAL ASSETS | $ | 2,215,883 | $ | 1,939,783 |
See Accompanying Notes to the Consolidated Financial Statements
64 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONT’D)
AS OF SEPTEMBER 30,
2018 | 2017 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Liabilities: | ||||||||
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs | $ | 711,545,649 | $ | 591,364,371 | ||||
Loans Payable | 186,608,676 | 120,091,417 | ||||||
Accounts Payable and Accrued Expenses | 5,891,172 | 4,450,753 | ||||||
Other Liabilities | 16,426,622 | 14,265,518 | ||||||
Total Liabilities | 920,472,119 | 730,172,059 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Shareholders’ Equity: | ||||||||
6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: 16,400,000 and 12,400,000 Shares Authorized as of September 30, 2018 and 2017, respectively; 11,488,001 and 9,839,445 Shares Issued and Outstanding as of September 30, 2018 and 2017, respectively | 287,200,025 | 245,986,125 | ||||||
Common Stock, $0.01 Par Value Per Share: 188,039,750 and 192,039,750 Shares Authorized as of September 30, 2018 and 2017, respectively; 81,503,134 and 75,630,521 Shares Issued and Outstanding as of September 30, 2018 and 2017, respectively | 815,031 | 756,305 | ||||||
Excess Stock, $0.01 Par Value Per Share: 200,000,000 Shares Authorized as of September 30, 2018 and 2017; No Shares Issued or Outstanding as of September 30, 2018 and 2017 | -0- | -0- | ||||||
Additional Paid-In Capital | 534,635,290 | 459,552,701 | ||||||
Accumulated Other Comprehensive Income (Loss) | (24,744,579 | ) | 6,570,565 | |||||
Undistributed Income | -0- | -0- | ||||||
Total Shareholders’ Equity | 797,905,767 | 712,865,696 | ||||||
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY | $ | 1,718,377,886 | $ | 1,443,037,755 |
(in thousands except per share amounts)
2021 | 2020 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Liabilities: | ||||||||
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs | $ | 832,184 | $ | 799,507 | ||||
Loans Payable | 250,000 | 75,000 | ||||||
Accounts Payable and Accrued Expenses | 8,231 | 3,998 | ||||||
Other Liabilities | 30,734 | 23,673 | ||||||
Total Liabilities | 1,121,149 | 902,178 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Shareholders’ Equity: | ||||||||
6.125% Series C Cumulative Redeemable Preferred Stock, $ Par Value Per Share: and Shares Authorized as of September 30, 2021 and 2020, respectively; and Shares Issued and Outstanding As of September 30, 2021 and 2020, respectively | 549,640 | 471,994 | ||||||
Common Stock, $ respectively Par Value Per Share: and Shares Authorized as of September 30, 2021 and 2020, respectively; and Shares Issued and Outstanding as of September 30, 2021 and 2020, | 983 | 981 | ||||||
Excess Stock, $ Par Value Per Share: Shares Authorized as of September 30, 2021 and 2020; Shares Issued or Outstanding as of September 30, 2021 and 2020 | 0 | 0 | ||||||
Additional Paid-In Capital | 546,341 | 568,998 | ||||||
Accumulated Other Comprehensive Loss | (2,230 | ) | (4,368 | ) | ||||
Undistributed Income | 0 | 0 | ||||||
Total Shareholders’ Equity | 1,094,734 | 1,037,605 | ||||||
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY | $ | 2,215,883 | $ | 1,939,783 |
See Accompanying Notes to the Consolidated Financial Statements
65 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR THE YEARS ENDED SEPTEMBER 30,
2018 | 2017 | 2016 | ||||||||||
INCOME: | ||||||||||||
Rental Revenue | $ | 115,864,119 | $ | 97,659,778 | $ | 81,592,429 | ||||||
Reimbursement Revenue | 23,297,730 | 18,725,527 | 16,163,004 | |||||||||
Lease Termination Income | 210,261 | -0- | -0- | |||||||||
TOTAL INCOME | 139,372,110 | 116,385,305 | 97,755,433 | |||||||||
EXPENSES: | ||||||||||||
Real Estate Taxes | 18,596,239 | 15,266,634 | 13,294,724 | |||||||||
Operating Expenses | 5,793,878 | 4,887,922 | 4,273,899 | |||||||||
General and Administrative Expenses | 8,776,579 | 7,809,546 | 7,936,124 | |||||||||
Acquisition Costs | -0- | 178,526 | 730,441 | |||||||||
Depreciation | 36,175,923 | 29,634,998 | 24,055,022 | |||||||||
Amortization of Capitalized Lease Costs and Intangible Assets | 2,391,104 | 1,824,751 | 2,032,658 | |||||||||
TOTAL EXPENSES | 71,733,723 | 59,602,377 | 52,322,868 | |||||||||
OTHER INCOME (EXPENSE): | ||||||||||||
Dividend and Interest Income | 13,120,465 | 6,930,564 | 5,616,392 | |||||||||
Gain on Sale of Securities Transactions | 111,387 | 2,311,714 | 4,398,599 | |||||||||
Interest Expense, including Amortization of Financing Costs | (32,349,705 | ) | (25,754,121 | ) | (22,953,049 | ) | ||||||
TOTAL OTHER INCOME (EXPENSE) | (19,117,853 | ) | (16,511,843 | ) | (12,938,058 | ) | ||||||
INCOME FROM CONTINUING OPERATIONS | 48,520,534 | 40,271,085 | 32,494,507 | |||||||||
Gain on Sale of Real Estate Investments | 7,485,266 | -0- | -0- | |||||||||
NET INCOME | 56,005,800 | 40,271,085 | 32,494,507 | |||||||||
Less: Preferred Dividends | 17,190,456 | 14,861,686 | 9,020,470 | |||||||||
Less: Redemption of Preferred Stock | -0- | 2,467,165 | 2,942,149 | |||||||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 38,815,344 | $ | 22,942,234 | $ | 20,531,888 |
(in thousands)
2021 | 2020 | 2019 | ||||||||||
INCOME: | ||||||||||||
Rental Revenue | $ | 155,044 | $ | 141,583 | $ | 132,524 | ||||||
Reimbursement Revenue | 27,712 | 26,234 | 22,297 | |||||||||
Lease Termination Income | 377 | 0 | 0 | |||||||||
TOTAL INCOME | 183,133 | 167,817 | 154,821 | |||||||||
EXPENSES: | ||||||||||||
Real Estate Taxes | 21,798 | 20,193 | 17,010 | |||||||||
Operating Expenses | 6,984 | 6,919 | 6,464 | |||||||||
General and Administrative Expenses | 9,353 | 8,932 | 9,081 | |||||||||
Non-recurring Strategic Alternatives & Proxy Costs | 35,920 | 0 | 0 | |||||||||
Non-recurring Severance Expense | 0 | 786 | 0 | |||||||||
Depreciation | 51,478 | 46,670 | 43,020 | |||||||||
Amortization of Capitalized Lease Costs and Intangible Assets | 3,586 | 3,180 | 2,870 | |||||||||
TOTAL EXPENSES | 129,119 | 86,680 | 78,445 | |||||||||
OTHER INCOME (EXPENSE): | ||||||||||||
Dividend Income | 6,182 | 10,445 | 15,168 | |||||||||
Realized Gain on Sale of Real Estate Investment | 6,376 | 0 | 0 | |||||||||
Realized Gain on Sale of Securities Transactions | 2,248 | 0 | 0 | |||||||||
Unrealized Holding Gains (Losses) Arising During the Periods | 50,239 | (77,380 | ) | (24,680 | ) | |||||||
Interest Expense, including Amortization of Financing Costs | (37,880 | ) | (36,376 | ) | (36,912 | ) | ||||||
TOTAL OTHER INCOME (EXPENSE) | 27,165 | (103,311 | ) | (46,424 | ) | |||||||
NET INCOME (LOSS) | 81,179 | (22,174 | ) | 29,952 | ||||||||
Less: Net Income (Loss) Attributable to Non-Controlling Interest | 2,996 | (31 | ) | 152 | ||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO SHAREHOLDERS | 78,183 | (22,143 | ) | 29,800 | ||||||||
Less: Preferred Dividends | 33,419 | 26,474 | 18,774 | |||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 44,764 | $ | (48,617 | ) | $ | 11,026 |
See Accompanying Notes to the Consolidated Financial Statements
66 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR THE YEARS ENDED SEPTEMBER 30,
2018 | 2017 | 2016 | ||||||||||
BASIC INCOME – PER SHARE | ||||||||||||
Net Income | $ | 0.71 | $ | 0.56 | $ | 0.50 | ||||||
Less: Preferred Dividends | (0.22 | ) | (0.21 | ) | (0.14 | ) | ||||||
Less: Redemption of Preferred Stock | -0- | (0.03 | ) | (0.05 | ) | |||||||
Net Income Attributable to Common Shareholders – Basic | $ | 0.49 | $ | 0.32 | $ | 0.31 | ||||||
DILUTED INCOME – PER SHARE | ||||||||||||
Net Income | $ | 0.71 | $ | 0.56 | $ | 0.50 | ||||||
Less: Preferred Dividends | (0.22 | ) | (0.21 | ) | (0.14 | ) | ||||||
Less: Redemption of Preferred Stock | -0- | (0.03 | ) | (0.05 | ) | |||||||
Net Income Attributable to Common Shareholders – Diluted | $ | 0.49 | $ | 0.32 | $ | 0.31 | ||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||
Basic | 78,619,440 | 72,114,078 | 65,468,564 | |||||||||
Diluted | 78,802,208 | 72,249,691 | 65,558,284 |
2021 | 2020 | 2019 | ||||||||||
BASIC INCOME – PER SHARE | ||||||||||||
Net Income (Loss) | $ | 0.83 | $ | (0.23 | ) | $ | 0.32 | |||||
Less: Net Income (Loss) Attributable to Non-Controlling Interest | (0.03 | ) | 0 | 0 | ||||||||
Net Income (Loss) Attributable to Shareholders | $ | 0.80 | $ | (0.23 | ) | $ | 0.32 | |||||
Less: Preferred Dividends | (0.34 | ) | (0.27 | ) | (0.20 | ) | ||||||
Net Income (Loss) Attributable to Common Shareholders – Basic | $ | 0.46 | $ | (0.50 | ) | $ | 0.12 | |||||
DILUTED INCOME – PER SHARE | ||||||||||||
Net Income (Loss) | $ | 0.82 | $ | (0.23 | ) | $ | 0.32 | |||||
Less: Net Income (Loss) Attributable to Non-Controlling Interest | (0.03 | ) | 0 | 0 | ||||||||
Net Income (Loss) Attributable to Shareholders | $ | 0.79 | $ | (0.23 | ) | $ | 0.32 | |||||
Less: Preferred Dividends | (0.34 | ) | (0.27 | ) | (0.20 | ) | ||||||
Net Income (Loss) Attributable to Common Shareholders – Diluted | $ | 0.45 | $ | (0.50 | ) | $ | 0.12 | |||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (in thousands) | ||||||||||||
Basic | 98,253 | 98,082 | 93,387 | |||||||||
Diluted | 98,443 | 98,164 | 93,485 |
See Accompanying Notes to the Consolidated Financial Statements
67 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED SEPTEMBER 30,
2018 | 2017 | 2016 | ||||||||||
Net Income | $ | 56,005,800 | $ | 40,271,085 | $ | 32,494,507 | ||||||
Other Comprehensive Income: | ||||||||||||
Unrealized Holding Gains (Losses) Arising During the Period | (31,203,757 | ) | (4,059,988 | ) | 22,782,469 | |||||||
Reclassification Adjustment for Net Gains Realized in Income | (111,387 | ) | (2,311,714 | ) | (4,398,599 | ) | ||||||
Total Comprehensive Income | 24,690,656 | 33,899,383 | 50,878,377 | |||||||||
Less: Preferred Dividends | 17,190,456 | 14,861,686 | 9,020,470 | |||||||||
Less: Redemption of Preferred Stock | -0- | 2,467,165 | 2,942,149 | |||||||||
Comprehensive Income Attributable to Common Shareholders | $ | 7,500,200 | $ | 16,570,532 | $ | 38,915,758 |
(in thousands)
2021 | 2020 | 2019 | ||||||||||
Net Income (Loss) | $ | 81,179 | $ | (22,174 | ) | $ | 29,952 | |||||
Other Comprehensive Income: | ||||||||||||
Change in Fair Value of Interest Rate Swap Agreement | 2,138 | (4,368 | ) | 0 | ||||||||
Total Comprehensive Income (Loss) | 83,317 | (26,542 | ) | 29,952 | ||||||||
Less: Net Income (Loss) Attributable to Non-Controlling Interest | (2,996 | ) | 31 | (152 | ) | |||||||
Comprehensive Income (Loss) Attributable to Shareholders | 80,321 | (26,511 | ) | 29,800 | ||||||||
Less: Preferred Dividends | 33,419 | 26,474 | 18,774 | |||||||||
Comprehensive Income (Loss) Attributable to Common Shareholders | $ | 46,902 | $ | (52,985 | ) | $ | 11,026 |
See Accompanying Notes to the Consolidated Financial Statements
68 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED SEPTEMBER 30, 2018, 2017,2021, 2020, AND 20162019
Common Stock | Preferred Stock Series A | Preferred Stock Series B | Preferred Stock Series C | Additional Paid in Capital | ||||||||||||||||
Balance September 30, 2015 | $ | 621,235 | $ | 53,493,750 | $ | 57,500,000 | $ | -0- | $ | 339,837,258 | ||||||||||
Shares Issued in Connection with the DRIP (1) | 65,157 | -0- | -0- | -0- | 72,110,640 | |||||||||||||||
Shares Issued in Connection with Underwritten Public Offering of 6.125% Series C Preferred Stock, net of offering costs | -0- | -0- | -0- | 135,000,000 | (4,456,578 | ) | ||||||||||||||
Preferred Stock Called for Redemption | -0- | (53,493,750 | ) | -0- | -0- | 2,930,649 | ||||||||||||||
Shares Issued Through the Exercise of Stock Options | 2,450 | -0- | -0- | -0- | 1,880,850 | |||||||||||||||
Shares Issued Through Restricted Stock Awards | 400 | -0- | -0- | -0- | (400 | ) | ||||||||||||||
Cancellation of Shares Related to Forfeiture of Restricted Stock Awards | (32 | ) | -0- | -0- | -0- | 32 | ||||||||||||||
Stock Compensation Expense | -0- | -0- | -0- | -0- | 926,465 | |||||||||||||||
Distributions To Common Shareholders | -0- | -0- | -0- | -0- | (21,502,295 | ) | ||||||||||||||
Net Income | -0- | -0- | -0- | -0- | -0- | |||||||||||||||
Preferred Dividends | -0- | -0- | -0- | -0- | -0- | |||||||||||||||
Change in Unrealized Net Holding Gain (Loss) on Securities Available for Sale, Net of Reclassification Adjustment | -0- | -0- | -0- | -0- | -0- | |||||||||||||||
Balance September 30, 2016 | 689,210 | -0- | 57,500,000 | 135,000,000 | 391,726,621 | |||||||||||||||
Shares Issued in Connection with the DRIP (1) | 66,327 | -0- | -0- | -0- | 91,865,504 | |||||||||||||||
Shares Issued in Connection with Underwritten Public Offering of 6.125% Series C Preferred Stock, net of offering costs | -0- | -0- | -0- | 75,000,000 | (3,996,907 | ) | ||||||||||||||
Shares Issued in Connection with At-The-Market Offerings of 6.125% Series C Preferred Stock, net of offering costs | -0- | -0- | -0- | 35,986,125 | (255,906 | ) | ||||||||||||||
Preferred Stock Called for Redemption | -0- | -0- | (57,500,000 | ) | -0- | 2,467,165 | ||||||||||||||
Shares Issued Through the Exercise of Stock Options | 650 | -0- | -0- | -0- | 468,650 | |||||||||||||||
Shares Issued Through Restricted Stock Awards | 110 | -0- | -0- | -0- | (110 | ) | ||||||||||||||
Stock Compensation Expense | 8 | -0- | -0- | -0- | 624,698 | |||||||||||||||
Distributions To Common Shareholders | -0- | -0- | -0- | -0- | (23,347,014 | ) | ||||||||||||||
Net Income | -0- | -0- | -0- | -0- | -0- | |||||||||||||||
Preferred Dividends | -0- | -0- | -0- | -0- | -0- | |||||||||||||||
Change in Unrealized Net Holding Gain (Loss) on Securities Available for Sale, Net of Reclassification Adjustment | -0- | -0- | -0- | -0- | -0- | |||||||||||||||
Balance September 30, 2017 | 756,305 | -0- | -0- | 245,986,125 | 459,552,701 | |||||||||||||||
Shares Issued in Connection with the DRIP (1) | 58,164 | -0- | -0- | -0- | 89,970,625 | |||||||||||||||
Shares Issued in Connection with At-The-Market Offerings of 6.125% Series C Preferred Stock, net of offering costs | -0- | -0- | -0- | 41,213,900 | (1,120,250 | ) | ||||||||||||||
Shares Issued Through the Exercise of Stock Options | 400 | -0- | -0- | -0- | 569,200 | |||||||||||||||
Shares Issued Through Restricted Stock Awards | 125 | -0- | -0- | -0- | (125 | ) | ||||||||||||||
Stock Compensation Expense | 37 | -0- | -0- | -0- | 433,858 | |||||||||||||||
Distributions To Common Shareholders | -0- | -0- | -0- | -0- | �� | (14,770,719 | ) | |||||||||||||
Net Income | -0- | -0- | -0- | -0- | -0- | |||||||||||||||
Preferred Dividends | -0- | -0- | -0- | -0- | -0- | |||||||||||||||
Change in Unrealized Net Holding Gain (Loss) on Securities Available for Sale, Net of Reclassification Adjustment | -0- | -0- | -0- | -0- | -0- | |||||||||||||||
Balance September 30, 2018 | $ | 815,031 | $ | -0- | $ | -0- | $ | 287,200,025 | $ | 534,635,290 |
(in thousands except per share amounts)
Common Stock | Preferred Stock Series C | Additional Paid in Capital | ||||||||||
Balance September 30, 2018 | $ | 815 | $ | 287,200 | $ | 534,635 | ||||||
Impact of Adoption of Accounting Standards Update 2016-01 | 0 | 0 | 0 | |||||||||
Shares Issued in Connection with the DRIP (1) | 56 | 0 | 73,909 | |||||||||
Shares Issued in Connection with Underwritten Public Offering of Common Stock, net of offering costs | 92 | 0 | 132,246 | |||||||||
Shares Issued in Connection with At-The-Market Offerings of 6.125% Series C Preferred Stock, net of offering costs | 0 | 60,478 | (2,279 | ) | ||||||||
Shares Issued Through the Exercise of Stock Options | 1 | 0 | 566 | |||||||||
Stock Compensation Expense | 0 | 0 | 784 | |||||||||
Distributions To Common Shareholders ($ per share) | 0 | 0 | (77,460 | ) | ||||||||
Net Income Attributable to Shareholders | 0 | 0 | 0 | |||||||||
Preferred Dividends ($ per share) | 0 | 0 | 0 | |||||||||
Balance September 30, 2019 | 964 | 347,678 | 662,401 | |||||||||
Shares Issued in Connection with the DRIP (1) | 20 | 0 | 26,391 | |||||||||
Shares Issued in Connection with At-The-Market Offerings of 6.125% Series C Preferred Stock, net of offering costs | 0 | 124,316 | (1,934 | ) | ||||||||
Shares Repurchased through the Common Stock Repurchase Plan | (4 | ) | 0 | (4,272 | ) | |||||||
Shares Issued Through the Exercise of Stock Options | 1 | 0 | 1,015 | |||||||||
Stock Compensation Expense | 0 | 0 | 452 | |||||||||
Distributions To Common Shareholders ($ per share) | 0 | 0 | (115,055 | ) | ||||||||
Net Income (Loss) Attributable to Shareholders | 0 | 0 | 0 | |||||||||
Preferred Dividends ($ per share) | 0 | 0 | 0 | |||||||||
Change in Fair Value of Interest Rate Swap Agreement | 0 | 0 | 0 | |||||||||
Balance September 30, 2020 | 981 | 471,994 | 568,998 | |||||||||
Shares Issued in Connection with the DRIP (1) | 1 | 0 | 1,360 | |||||||||
Shares Issued in Connection with At-The-Market Offerings of 6.125% Series C Preferred Stock, net of offering costs | 0 | 77,646 | (1,688 | ) | ||||||||
Shares Issued Through the Exercise of Stock Options | 1 | 0 | 2,374 | |||||||||
Stock Compensation Expense | 0 | 0 | 287 | |||||||||
Distributions To Common Shareholders ($ per share) | 0 | 0 | (24,990 | ) | ||||||||
Distributions To Common Shareholders | 0 | 0 | (24,990 | ) | ||||||||
Net Income Attributable to Shareholders | 0 | 0 | 0 | |||||||||
Preferred Dividends ($ per share) | 0 | 0 | 0 | |||||||||
Preferred Dividends | 0 | 0 | 0 | |||||||||
Change in Fair Value of Interest Rate Swap Agreement | 0 | 0 | 0 | |||||||||
Balance September 30, 2021 | $ | 983 | $ | 549,640 | $ | 546,341 |
(1) Dividend Reinvestment and Stock Purchase Plan
See Accompanying Notes to the Consolidated Financial Statements
69 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED SEPTEMBER 30, 2018, 20172021, 2020 AND 2016,2019, CONT’D.
Undistributed Income (Loss) | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | ||||||||||
Balance September 30, 2015 | $ | -0- | $ | (5,441,603 | ) | $ | 446,010,640 | |||||
Shares Issued in Connection with the DRIP (1) | -0- | -0- | 72,175,797 | |||||||||
Shares Issued in Connection with Underwritten Public Offering of 6.125% Series C Preferred Stock, net of offering costs | -0- | -0- | 130,543,422 | |||||||||
Preferred Stock Called for Redemption | (2,942,149 | ) | -0- | (53,505,250 | ) | |||||||
Shares Issued Through the Exercise of Stock Options | -0- | -0- | 1,883,300 | |||||||||
Shares Issued Through Restricted Stock Awards | -0- | -0- | -0- | |||||||||
Cancellation of Shares Related to Forfeiture of Restricted Stock Awards | -0- | -0- | -0- | |||||||||
Stock Compensation Expense | -0- | -0- | 926,465 | |||||||||
Distributions To Common Shareholders | (20,531,888 | ) | -0- | (42,034,183 | ) | |||||||
Net Income | 32,494,507 | -0- | 32,494,507 | |||||||||
Preferred Dividends | (9,020,470 | ) | -0- | (9,020,470 | ) | |||||||
Change in Unrealized Net Holding Gain (Loss) on Securities Available for Sale, Net of Reclassification Adjustment | -0- | 18,383,870 | 18,383,870 | |||||||||
Balance September 30, 2016 | -0- | 12,942,267 | 597,858,098 | |||||||||
Shares Issued in Connection with the DRIP (1) | -0- | -0- | 91,931,831 | |||||||||
Shares Issued in Connection with Underwritten Public Offering of 6.125% Series C Preferred Stock, net of offering costs | -0- | -0- | 71,003,093 | |||||||||
Shares Issued in Connection with At-The-Market Offerings of 6.125% Series C Preferred Stock, net of offering costs | -0- | -0- | 35,730,219 | |||||||||
Preferred Stock Called for Redemption | (2,467,165 | ) | -0- | (57,500,000 | ) | |||||||
Shares Issued Through the Exercise of Stock Options | -0- | -0- | 469,300 | |||||||||
Shares Issued Through Restricted Stock Awards | -0- | -0- | -0- | |||||||||
Stock Compensation Expense | -0- | -0- | 624,706 | |||||||||
Distributions To Common Shareholders | (22,942,234 | ) | -0- | (46,289,248 | ) | |||||||
Net Income | 40,271,085 | -0- | 40,271,085 | |||||||||
Preferred Dividends | (14,861,686 | ) | -0- | (14,861,686 | ) | |||||||
Change in Unrealized Net Holding Gain (Loss) on Securities Available for Sale, Net of Reclassification Adjustment | -0- | (6,371,702 | ) | (6,371,702 | ) | |||||||
Balance September 30, 2017 | -0- | 6,570,565 | 712,865,696 | |||||||||
Shares Issued in Connection with the DRIP (1) | -0- | -0- | 90,028,789 | |||||||||
Shares Issued in Connection with At-The-Market Offerings of 6.125% Series C Preferred Stock, net of offering costs | -0- | -0- | 40,093,650 | |||||||||
Shares Issued Through the Exercise of Stock Options | -0- | -0- | 569,600 | |||||||||
Shares Issued Through Restricted Stock Awards | -0- | -0- | -0- | |||||||||
Stock Compensation Expense | -0- | -0- | 433,895 | |||||||||
Distributions To Common Shareholders | (38,815,344 | ) | -0- | (53,586,063 | ) | |||||||
Net Income | 56,005,800 | -0- | 56,005,800 | |||||||||
Preferred Dividends | (17,190,456 | ) | -0- | (17,190,456 | ) | |||||||
Change in Unrealized Net Holding Gain (Loss) on Securities Available for Sale, Net of Reclassification Adjustment | -0- | (31,315,144 | ) | (31,315,144 | ) | |||||||
Balance September 30, 2018 | $ | -0- | $ | (24,744,579 | ) | $ | 797,905,767 |
(in thousands except per share amounts)
Undistributed Income (Loss) | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | ||||||||||
Balance September 30, 2018 | $ | 0 | $ | (24,744 | ) | $ | 797,906 | |||||
Impact of Adoption of Accounting Standards Update 2016-01 | (24,744 | ) | 24,744 | 0 | ||||||||
Shares Issued in Connection with the DRIP (1) | 0 | 0 | 73,965 | |||||||||
Shares Issued in Connection with Underwritten Public Offering of Common Stock, net of offering costs | 0 | 0 | 132,338 | |||||||||
Shares Issued in Connection with At-The-Market Offerings of 6.125% Series C Preferred Stock, net of offering costs | 0 | 0 | 58,199 | |||||||||
Shares Issued Through the Exercise of Stock Options | 0 | 0 | 567 | |||||||||
Stock Compensation Expense | 0 | 0 | 784 | |||||||||
Distributions To Common Shareholders ($0.68 per share) | 13,718 | 0 | (63,742 | ) | ||||||||
Net Income Attributable to Shareholders | 29,800 | 0 | 29,800 | |||||||||
Preferred Dividends ($1.53125 per share) | (18,774 | ) | 0 | (18,774 | ) | |||||||
Balance September 30, 2019 | 0 | 0 | 1,011,043 | |||||||||
Shares Issued in Connection with the DRIP (1) | 0 | 0 | 26,411 | |||||||||
Shares Issued in Connection with At-The-Market Offerings of 6.125% Series C Preferred Stock, net of offering costs | 0 | 0 | 122,382 | |||||||||
Shares Repurchased through the Common Stock Repurchase Plan | 0 | 0 | (4,276 | ) | ||||||||
Shares Issued Through the Exercise of Stock Options | 0 | 0 | 1,016 | |||||||||
Stock Compensation Expense | 0 | 0 | 452 | |||||||||
Distributions To Common Shareholders ($0.68 per share) | 48,617 | 0 | (66,438 | ) | ||||||||
Net Income (Loss) Attributable to Shareholders | (22,143 | ) | 0 | (22,143 | ) | |||||||
Preferred Dividends ($1.53125 per share) | (26,474 | ) | 0 | (26,474 | ) | |||||||
Change in Fair Value of Interest Rate Swap Agreement | 0 | (4,368 | ) | (4,368 | ) | |||||||
Balance September 30, 2020 | 0 | (4,368 | ) | 1,037,605 | ||||||||
Shares Issued in Connection with the DRIP (1) | 0 | 0 | 1,361 | |||||||||
Shares Issued in Connection with At-The-Market Offerings of 6.125% Series C Preferred Stock, net of offering costs | 0 | 0 | 75,958 | |||||||||
Shares Issued Through the Exercise of Stock Options | 0 | 0 | 2,375 | |||||||||
Stock Compensation Expense | 0 | 0 | 287 | |||||||||
Distributions To Common Shareholders ($0.71 per share) | (44,764 | ) | 0 | (69,754 | ) | |||||||
Distributions To Common Shareholders | (44,764 | ) | 0 | (69,754 | ) | |||||||
Net Income Attributable to Shareholders | 78,183 | 0 | 78,183 | |||||||||
Preferred Dividends ($1.53125 per share) | (33,419 | ) | 0 | (33,419 | ) | |||||||
Preferred Dividends | (33,419 | ) | 0 | (33,419 | ) | |||||||
Change in Fair Value of Interest Rate Swap Agreement | 0 | 2,138 | 2,138 | |||||||||
Balance September 30, 2021 | $ | 0 | $ | (2,230 | ) | $ | 1,094,734 |
(1) Dividend Reinvestment and Stock Purchase Plan
See Accompanying Notes to the Consolidated Financial Statements
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MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30,
2018 | 2017 | 2016 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net Income | $ | 56,005,800 | $ | 40,271,085 | $ | 32,494,507 | ||||||
Noncash Items Included in Net Income: | ||||||||||||
Depreciation & Amortization | 39,788,010 | 32,694,009 | 27,203,918 | |||||||||
Stock Compensation Expense | 433,895 | 624,706 | 926,465 | |||||||||
Deferred Straight Line Rent | (1,972,588 | ) | (1,027,927 | ) | (1,709,821 | ) | ||||||
Gain on Sale of Securities Transactions | (111,387 | ) | (2,311,714 | ) | (4,398,599 | ) | ||||||
(Gain) Loss on Sale of Real Estate Investments | (7,485,266 | ) | 95,336 | -0- | ||||||||
Changes in: | ||||||||||||
Tenant & Other Receivables | 1,396,729 | 357,823 | 69,317 | |||||||||
Prepaid Expenses | (754,922 | ) | (603,887 | ) | (899,371 | ) | ||||||
Other Assets & Capitalized Lease Costs | (2,036,854 | ) | 15,353 | (1,814,638 | ) | |||||||
Accounts Payable, Accrued Expenses & Other Liabilities | 265,745 | 3,753,082 | 2,827,722 | |||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 85,529,162 | 73,867,866 | 54,699,500 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Purchase of Real Estate & Intangible Assets | (283,402,845 | ) | (286,951,980 | ) | (210,747,340 | ) | ||||||
Capital Improvements | (9,084,163 | ) | (4,974,988 | ) | (21,566,561 | ) | ||||||
Proceeds from Sale of Real Estate Investments | 22,083,340 | 4,125,819 | -0- | |||||||||
Return of Deposits on Real Estate | 450,000 | 3,400,000 | 2,950,000 | |||||||||
Deposits Paid on Acquisitions of Real Estate | (200,000 | ) | (450,000 | ) | (2,200,000 | ) | ||||||
Proceeds from Sale of Securities Available for Sale | 2,620,166 | 17,274,946 | 22,774,768 | |||||||||
Purchase of Securities Available for Sale | (64,979,698 | ) | (71,494,810 | ) | (19,055,956 | ) | ||||||
NET CASH USED IN INVESTING ACTIVITIES | (332,513,200 | ) | (339,071,013 | ) | (227,845,089 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Proceeds from Fixed Rate Mortgage Notes Payable | 175,160,000 | 188,809,000 | 153,428,485 | |||||||||
Principal Payments on Fixed Rate Mortgage Notes Payable | (54,354,212 | ) | (73,594,586 | ) | (43,671,506 | ) | ||||||
Net Draws (Repayments) from Loans Payable | 66,517,259 | 39,300,733 | (4,250,702 | ) | ||||||||
Financing Costs Paid on Debt | (1,469,914 | ) | (2,190,098 | ) | (2,646,393 | ) | ||||||
Redemption of 7.625% Series A Preferred Stock | -0- | (53,493,750 | ) | -0- | ||||||||
Redemption of 7.875% Series B Preferred Stock | -0- | (57,500,000 | ) | -0- | ||||||||
Proceeds from Underwritten Public Offering of 6.125% Series C Preferred Stock, net of offering costs | -0- | 71,003,093 | 130,543,422 | |||||||||
Proceeds from At-The-Market Preferred Equity Program, net of offering costs | 40,093,650 | 35,733,885 | -0- | |||||||||
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments | 77,100,433 | 81,805,937 | 63,806,651 | |||||||||
Proceeds from the Exercise of Stock Options | 569,600 | 469,300 | 1,883,300 | |||||||||
Preferred Dividends Paid | (16,876,532 | ) | (14,500,474 | ) | (8,607,032 | ) | ||||||
Common Dividends Paid, net of Reinvestments | (40,657,707 | ) | (36,163,355 | ) | (33,665,037 | ) | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 246,082,577 | 179,679,685 | 256,821,188 | |||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | (901,461 | ) | (85,523,462 | ) | 83,675,599 | |||||||
Cash and Cash Equivalents at Beginning of Year | 10,226,046 | 95,749,508 | 12,073,909 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | 9,324,585 | $ | 10,226,046 | $ | 95,749,508 |
(in thousands)
2021 | 2020 | 2019 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net Income (Loss) | $ | 81,179 | $ | (22,174 | ) | $ | 29,952 | |||||
Noncash Items Included in Net Income (Loss): | ||||||||||||
Depreciation & Amortization | 56,448 | 51,263 | 47,142 | |||||||||
Stock Compensation Expense | 287 | 452 | 784 | |||||||||
Deferred Straight Line Rent | (3,024 | ) | (1,976 | ) | (1,926 | ) | ||||||
Securities Available for Sale Received as Dividend Income | (1,012 | ) | (1,213 | ) | (874 | ) | ||||||
Unrealized Holding (Gains) Losses Arising During the Periods | (50,239 | ) | 77,380 | 24,680 | ||||||||
Realized Gain on Sale of Securities Transactions | (2,248 | ) | 0 | 0 | ||||||||
Realized Gain on Sale of Real Estate Investment | (6,376 | ) | 0 | 0 | ||||||||
Changes in: | ||||||||||||
Tenant & Other Receivables | 451 | (3,993 | ) | 18 | ||||||||
Prepaid Expenses | (948 | ) | (840 | ) | (524 | ) | ||||||
Other Assets & Capitalized Lease Costs | (733 | ) | (2,052 | ) | 729 | |||||||
Accounts Payable, Accrued Expenses & Other Liabilities | 11,023 | 2,014 | 767 | |||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 84,808 | 98,861 | 100,748 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Purchase of Real Estate & Intangible Assets | (260,833 | ) | (175,261 | ) | (138,964 | ) | ||||||
Capital Improvements | (7,959 | ) | (5,996 | ) | (14,734 | ) | ||||||
Net Proceeds from Sale of Real Estate Investment | 12,303 | 0 | 0 | |||||||||
Return of Deposits on Real Estate | 5,360 | 2,000 | 200 | |||||||||
Deposits Paid on Acquisitions of Real Estate | (5,515 | ) | (1,670 | ) | (6,000 | ) | ||||||
Proceeds from the Sale of Securities Available for Sale | 16,327 | 0 | 0 | |||||||||
Proceeds from Securities Available for Sale Called for Redemption | 2,500 | 251 | 0 | |||||||||
Purchase of Securities Available for Sale | 0 | 0 | (54,136 | ) | ||||||||
NET CASH USED IN INVESTING ACTIVITIES | (237,817 | ) | (180,676 | ) | (213,634 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Proceeds from Fixed Rate Mortgage Notes Payable | 104,000 | 110,310 | 96,500 | |||||||||
Principal Payments on Fixed Rate Mortgage Notes Payable | (71,749 | ) | (55,855 | ) | (63,350 | ) | ||||||
Net Draws (Repayments) from Loans Payable | 175,000 | (20,000 | ) | (91,609 | ) | |||||||
Financing Costs Paid on Debt | (567 | ) | (2,525 | ) | (662 | ) | ||||||
Proceeds from Underwritten Public Offering of Common Stock, net of offering costs | 0 | 0 | 132,338 | |||||||||
Proceeds from At-The-Market Preferred Equity Program, net of offering costs | 75,958 | 122,382 | 58,199 | |||||||||
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments | 320 | 18,815 | 57,079 | |||||||||
Net Distributions to Non-Controlling Interest | (5,491 | ) | (32 | ) | 0 | |||||||
Shares repurchased through the Common Stock Repurchase Plan | 0 | (4,276 | ) | 0 | ||||||||
Proceeds from the Exercise of Stock Options | 2,375 | 1,016 | 567 | |||||||||
Preferred Dividends Paid | (33,023 | ) | (25,839 | ) | (18,465 | ) | ||||||
Common Dividends Paid, net of Reinvestments | (68,713 | ) | (58,843 | ) | (46,856 | ) | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 178,110 | 85,153 | 123,741 | |||||||||
Net Increase in Cash and Cash Equivalents | 25,101 | 3,338 | 10,855 | |||||||||
Cash and Cash Equivalents at Beginning of Year | 23,517 | 20,179 | 9,324 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | 48,618 | $ | 23,517 | $ | 20,179 |
See Accompanying Notes to the Consolidated Financial Statements
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MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 20182021
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of the Business
Monmouth Real Estate Investment Corporation, a Maryland corporation, together with its consolidated subsidiaries (we, our, us, the Company or MREIC), operates as a real estate investment trust (REIT) deriving its income primarily from real estate rental operations. We were founded in 1968 and arehave been publicly owned since that time, making us one of the oldest public equity REITs in the world. As of September 30, 20182021 and 2017,2020, rental properties consisted of 111122 and 108119 property holdings, respectively. These properties are located in 3032 states: Alabama, Arizona, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington and Wisconsin. As of September 30, 2018,2021, our weighted average lease maturity was approximately 8.17.0 years and our annualized average base rent per occupied square foot was $6.01.$6.61. Our weighted average lease expiration has been 7.0 years or greater for over seven consecutive years. Our overall occupancy rate has been 98.9% or above for over six consecutive years. As of September 30, 2018,2021, the weighted average building age, based on the square footage of our buildings, was 8.710.2 years. In addition, we own a
Our portfolio of REIT securities which we generally limitmodern, net-leased industrial properties continues to no more than approximately 10%provide shareholders with reliable and predictable income streams. Our resilient occupancy rates and rent collection results highlight the mission-critical nature of our undepreciated assets (whichand underscore the essential need for our tenants’ operations. Furthermore, because our weighted average lease term is 7.0 years and our total assets excluding accumulated depreciation)weighted average fixed rate mortgage debt maturity is 10.9 years, we expect our cash flow to remain resilient over long periods of time. Our overall occupancy rate has been over 99% throughout the COVID-19 Pandemic and is currently 99.7%. Our base rent collections remained strong, averaging 99.9% throughout the COVID-19 Pandemic and we expect future months to be consistent with this trend.
US industrial real estate market conditions are as strong as they have ever been with record high asking rents, a robust development pipeline, and an all-time high occupancy rate of 96%. Companies are leasing space at record levels to handle the large increase in ecommerce sales as well as the need for safety stock to counter supply chain disruptions. Construction costs are rising dramatically due to the long lead times for sourcing materials. The amount of new construction for US industrial real estate has been increasing for several years as more industrial space is needed to handle direct-to-consumer distribution. It is estimated that ecommerce sales require three times the amount of warehouse space relative to brick and mortar retail sales. These new buildings are often highly automated and have much larger truck courts and parking requirements. Because modern industrial buildings are built to handle both wholesale distribution as well as direct to consumer distribution, they are known as omni-channel facilities. The West coast ports are continuing to experience severe bottlenecks in processing imports and therefor, container traffic is being diverted towards the Gulf and East coast ports. The West coast ports are continuing to experience severe bottlenecks in processing imports and as a result much container traffic is being diverted towards the Gulf and East coast ports. Given our geographic footprint, this trend is a very favorable one for us.
As previously announced, on November 5, 2021, we entered into a definitive merger agreement with Industrial Logistics Properties Trust, a Maryland real estate investment trust (“ILPT”), under which, on the terms and subject to the conditions set forth in the merger agreement, ILPT will acquire us in an all-cash transaction, with our common stockholders receiving $ in cash for each outstanding share of our common stock in connection with consummation of the transaction. ILPT’s acquisition of us is subject to obtaining the requisite approval of our common stockholders and the satisfaction of other customary closing conditions. Upon closing of the merger with ILPT, holders of our outstanding 6.125% Series C Cumulative Redeemable Preferred Stock (“Series C Preferred Stock”) will receive the amount of $25 per share plus any accrued and unpaid dividends. We plan to continue to pay our regular quarterly common stock dividend and our Series C Cumulative Redeemable Preferred Stock dividend for each full quarterly dividend period completed prior to the closing of the transaction. This transaction with ILPT represents the culmination of the publicly announced comprehensive strategic alternatives review processes conducted by our Board of Directors during 2021. Our Board re-initiated its strategic alternatives review process in September 2021 after a previous agreement for a merger that we entered into with another party, following a strategic alternatives review process earlier this year, did not receive the requisite approval of our stockholders.
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Use of Estimates
In preparing the financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), we are required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates and assumptions.
Segment Reporting & Financial Information
Our primary business is the ownership and management of real estate properties. We invest in well-located, modern, single tenant,single-tenant, industrial buildings leased primarily to investment-grade tenants or their subsidiaries on long-term net leases. We review operating and financial information for each property on an individual basis and, therefore, each property represents an individual operating segment. We evaluate financial performance using Net Operating Income (NOI) from property operations. NOI is a non-GAAP financial measure, which we define as recurring Rental and Reimbursement Revenue, less Real Estate Taxes and Operating Expenses, such as insurance, utilities and repairs and maintenance. We have aggregated the properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities, including the fact that they are operated as industrial properties subject to long-term net leases primarily to investment-grade tenants or their subsidiaries.
Principles of Consolidation and Non-controlling Interest
The consolidated financial statements include the Company and our wholly-owned subsidiaries. In 2005, we formed MREIC Financial, Inc., a taxable REIT subsidiary which has had no activity since inception. In 2007, we merged with Monmouth Capital Corporation (Monmouth Capital), with Monmouth Capital surviving as our wholly-owned subsidiary. All intercompany transactions and balances have been eliminated in consolidation.
Non-controlling interests
For real estate investments that the Company consolidates but does not own 100% interest, any resulting non-controlling interest, if considered material, is presented as a component of shareholders equity on its Consolidated Balance Sheet, and the portion of earnings or loss attributable to non-controlling interest is presented separately in the Consolidated Statements of Income (Loss). As a result of the sale of one of its majority owned real estate investments in fiscal 2021 (See Note 3), the Company has presented the non-controlling interest in its Statement of Income (Loss), however the presentation of non-controlling interest was considered immaterial to the Consolidated Balance Sheet and Consolidated Statements of Shareholder’s Equity.
Buildings and Improvements
Buildings and improvements are stated at the lower of depreciated cost or net realizable value. Depreciation is computed based on the straight-line method over the estimated useful lives of the assets. These lives are 39 years for buildings and range from 3 to 39 years for improvements.
We apply Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360-10, Property, Plant & Equipment (ASC 360-10) to measure impairment in real estate investments. Rental properties are individually evaluated for impairment when conditions exist which may indicate that it is probable that the sum of expected future cash flows (on an undiscounted basis without interest) from a rental property is less than its historical net cost basis. These expected future cash flows consider factors such as future operating income, trends and prospects as well as the effects of leasing demand, competition and other factors. Upon determination that an other-than-temporary impairment has occurred, rental properties are reduced to their fair value. For properties to be disposed of, an impairment loss is recognized when the fair value of the property, less the estimated cost to sell, is less than the carrying amount of the property measured at the time there is a commitment to sell the property and/or it is actively being marketed for sale. A property to be disposed of is reported at the lower of its carrying amount or its estimated fair value, less its cost to sell. Subsequent to the date that a property is held for disposition, depreciation expense is not recorded.
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Gains (Losses)Realized Gain on Sale of Real Estate Investment
Gains (losses)Realized Gain on the saleSale of real estate investments areReal Estate Investment is recognized only when the profit (loss) on a given saleit is determinable, and the seller is not obliged to perform significant activities after the sale to earn such profit (loss).
Acquisitions
Prior to the adoption of ASU 2017-01, upon acquisition of a property,determined that we allocated the purchase price of the property based upon the fair value of the assets acquired, which generally consisted of land, building and intangible assets, including above and below market leases and in-place leases. We allocated the purchase price to the fair value of the tangible assets of an acquired property generally determined by the third-party appraisal of the property obtained in conjunction with the purchase. The purchase price was further allocated to acquired above and below market leases based on the present value of the difference between prevailing market rates and the in-place lease rates over the remaining term. In addition, any remaining amounts of the purchase price were applied to in-place lease values based on our evaluation of the specific characteristics of each tenant’s lease. In-place leases that may have a customer relationship intangible value, including (but not limited to) the nature and extent of the existing relationship with the tenant, the tenant’s credit quality and expectations of lease renewals were also considered. Acquired above and below market leases were amortized to rental revenue over the remaining non-cancelable terms of the respective leases. The value of in-place lease intangibles was amortized to amortization expense over the remaining lease term. If a tenant terminated its lease early, the unamortized portion of the tenant improvements, leasing commissions, deferred rent, and the in-place lease value was charged to expense when there was a signed termination agreement,will collect substantially all of the conditionsconsideration to which we are entitled, possession and other attributes of ownership have been transferred to the termination agreementbuyer and we have no controlling financial interest. The application of these criteria can be complex and requires us to make assumptions. We have determined that all of these criteria were met for the tenant is no longer occupyingreal estate sold during the property and the termination consideration, if any, is probable of collection.periods presented.
As a result of the adoption of Accounting Standards Update (ASU) 2017-01, effective April 1, 2017, we no longer account for our property acquisitions as business combinations and insteadAcquisitions
We account for our property acquisitions as acquisitions of assets. In an acquisition of assets, certain acquisition costs are capitalized to real estate investments as part of the purchase price as opposed to being expensed as Acquisition Costs under the previous accounting treatment for business combinations. Therefore, as of April 1, 2017, we are no longer required to expense our Acquisition Costs.price. In addition, acquisitions that do not meet the definition of a business combination are accounted for as asset acquisitions whereby the consideration incurred is allocated to the individual assets acquired on a relative fair value basis.
Marketable Securities
Investments in securities available for sale primarily consist of marketable common and preferred stock securities of other REITs, which we generallyREITs. We limit the size of this portfolio to no more than approximately 10%5% of our undepreciated assets, (which is ourwhich we define as total assets excluding accumulated depreciation).depreciation. The value of the marketable securities was $143.5 million as of September 30, 2021, representing 5.6% of our undepreciated assets. We continue to believe that our REIT securities portfolio provides us with diversification, income, a source of potential liquidity when needed and also serves as a proxy for real estate when more favorable risk adjusted returns are not available in the private real estate markets. Our decision to reduce this threshold mainly stems from the implementation of accounting rule ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”, which took effect at the beginning of last fiscal year. This new rule requires that quarterly changes in the market value of our marketable securities flow through our Consolidated Statements of Income. The implementation of this accounting rule has resulted in increased volatility in our reported earnings and some of our key performance metrics. These marketable securities are all publicly-traded and purchased on the open market through private transactions or through dividend reinvestment plans. These securities may be classified among three categories: held-to-maturity, trading, and available-for-sale. We normally hold REIT securities on a long-term basis and have the ability and intent to hold securities to recovery. Therefore, as of September 30, 20182021 and 2017,2020, our securities are all classified as available-for-sale and are carried at fair value based upon quoted market prices in active markets. Gains or losses on the sale of securities are based on average cost and are accounted for on a trade date basis. Net unrealized holding gains and losses are excluded from earnings and reported as a separate component of Shareholders’ Equity until realized. The change in the unrealized net holding gains (losses) is reflected as Comprehensive Income (Loss).
In January 2016, the FASBFinancial Accounting Standards Board (FASB) issued ASUAccounting Standards Update (ASU) 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”.Liabilities.” ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes became effective for our fiscal year beginning October 1, 2018. The most significant change for us, once ASU 2016-01 was adopted, was the accounting treatment for our investments in marketable securities that are classified as available for sale.available-for-sale. The accounting treatment used for our Consolidated Financial Statements through Fiscalfiscal 2018 was that our investments in marketable securities, classified as available for sale, were carried at fair value, with net unrealized holding gains and losses being excluded from earnings and reported as a separate component of Shareholders’ Equity until realized and the change in net unrealized holding gains and losses being reflected as comprehensive income (loss). Under ASU 2016-01, effective October 1, 2018, these marketable securities continue to be measured at fair value, however, the changes in net unrealized holding gains and losses are now recognized through net income. Subsequent to the fiscal yearend,income on our Consolidated Statements of Income (Loss). On October 1, 2018, unrealized net holding losses of $24,744,579 were reclassedwe recorded a $(24.7) million adjustment to beginning retained earnings to recognize the unrealized losses previously recorded in “accumulated other comprehensive income” on our consolidated balance sheets.
We individually reviewUndistributed Income (Loss). In addition, $50.2 million, $(77.4) million and evaluate our marketable securities for impairment on a quarterly basis or when events or circumstances occur. We consider, among other things, credit aspects$(24.7) million of the issuer, amountnet unrealized holding gains (losses) have been reflected as Unrealized Holding Gains (Losses) Arising During the Periods in the accompanying Consolidated Statements of decline in fair value over costIncome (Loss) for the fiscal years ended 2021, 2020 and length of time in a continuous loss position. We have developed a general policy of evaluating whether an unrealized loss is other than temporary. On a quarterly basis, we make an initial review of every individual security in our portfolio. If the security is impaired, we first determine our intent and ability to hold this investment for a period of time sufficient to allow for any anticipated recovery in market value. Next, we determine the length of time and the extent of the impairment. Barring other factors, including the downgrading of the security or the cessation of dividends, if the fair value of the security is below cost by less than 20% for less than 6 months and we have the intent and ability to hold the security, the security is deemed to be temporarily impaired. Otherwise, we review additional information to determine whether the impairment is other than temporary. We discuss and analyze any relevant information known about the security, such as:2019, respectively.
We normally hold REIT securities on a long-term basis and have the ability and intent to hold securities to recovery. If a decline in fair value is determined to be other than temporary, an impairment charge is recognized in earnings and the cost basis of the individual security is written down to fair value as the new cost basis.
Cash and Cash Equivalents
Cash and cash equivalents include all cash and investments with an original maturity of three months or less. We maintain our cash in bank accounts in amounts that may exceed federally insured limits. We have not experienced any losses in these accounts in the past. The fair value of cash and cash equivalents approximates their current carrying amounts since all such items are short-term in nature.
Intangible Assets, Capitalized Lease Costs and Financing Costs
Intangible assets, consisting primarily of the value of in-place leases, are amortized to expense over the remaining terms of the respective leases. Upon termination of a lease, the unamortized portion is charged to expense. The weighted-averageweighted average amortization period upon acquisition for intangible assets recorded during 2018, 20172021, 2020 and 20162019 was 1217 years, 1314 years and 12 years, respectively.
Costs incurred in connection with the execution of leases are capitalized and amortized over the term of the respective leases. Unamortized lease costs are charged to expense upon cancellation of leases prior to the expiration of lease terms. Costs incurred in connection with obtaining mortgages and other financings and refinancingsre-financings are deferred and are amortized over the term of the related obligations using the effective interest method. Unamortized costs are charged to expense upon prepayment of the obligation. Amortization expense related to these deferred leasing and financing costs were $2,101,427, $2,089,259$2.7 million, $2.6 million and $2,072,120$2.2 million for the years ended September 30, 2018, 20172021, 2020 and 2016,2019, respectively. We estimate that aggregate amortization expense for existing assets will be approximately $2,128,000, $1,802,000, $1,553,000, $1,435,000$2.5 million, $2.4 million, $1.8 million, $1.4 million and $1,356,000$1.4 million for the fiscal years 2022, 2023, 2024, 2025 and 2026, respectively.
Derivative Instruments and Hedging Activities
In the normal course of business, we are exposed to financial market risks, including interest rate risk on our variable rate debt. We attempt to limit these risks by following established risk management policies, procedures and strategies, including the use of derivative financial instruments. Our primary strategy in entering into derivative contracts is to minimize the variability that changes in interest rates could have on its future cash flows. We generally employ derivative instruments that effectively convert a portion of our variable rate debt to fixed rate debt. We do not enter into derivative instruments for speculative purposes. As further described in “Note 7 – Mortgage Notes and Loans Payable”, in November 2019 2020,we entered into an interest rate swap agreement that has the effect of fixing the interest rate on our $75.0 million unsecured term loan (the “Term Loan”).
The interest rate for borrowings under the Term Loan will at our election, either i) bear interest at LIBOR plus 130 basis points to 200 basis points, depending on our leverage ratio, or ii) bear interest at BMO’s prime lending rate plus 30 basis points to 100 basis points, depending on our leverage ratio. The re-pricing and scheduled maturity dates, payment dates, index and the notional amounts of the interest rate swap agreement coincides with those of the underlying Term Loan. The interest rate swap agreement is net settled monthly. The Company has designated this derivative as a cash flow hedge and has recorded the fair value on the balance sheet in accordance with ASC 815, Derivatives and Hedging (See Note 14 for information on the determination of fair value). The effective portion of the gain or loss on this hedge will be reported as a component of Accumulated Other Comprehensive Income (Loss) on our Consolidated Balance Sheets. To the extent that the hedging relationship is not effective or does not qualify as a cash flow hedge, the ineffective portion is recorded in interest expense. Hedges that received designated hedge accounting treatment are evaluated for effectiveness at the time that they are designated as well as through the hedging period. As of September 30, 2021, 2022 and 2023, respectively.we have determined that this interest rate swap agreement is highly effective as a cash flow hedge. As a result, the fair value of this derivative of $2.2 million as of September 30, 2021 was recorded as a component of Accumulated Other Comprehensive Loss, with the corresponding liability included in Other Liabilities.
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Revenue Recognition
Rental revenue from tenants with leases having scheduled rental increases are recognized on a straight-line basis over the term of the lease. Tenant recoveries related to the reimbursement of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period the expenses are incurred. The reimbursements are recognized and presented gross, as we are generally the primary obligor and, with respect to purchasing goods and services from third-party suppliers, have discretion in selecting the supplier and bears the associated credit risk. These occupancy charges are recognized as earned.
When applicable, we provide an allowance for doubtful accounts against the portion of tenant and other receivables and deferred rent receivables, which are estimated to be uncollectible. For accounts receivables that we deem uncollectible, we use the direct write-off method. We did not have an allowance for doubtful accounts balance as of September 30, 2018 and 2017 and there were no write-off’s of any receivable accounts during the fiscal years ended 2018 and 2017.
Lease Termination Income
Lease Termination Income is recognized in operating revenues when there is a signed termination agreement, all of the conditions of the agreement have been met, the tenant is no longer occupying the property and the termination consideration is probable of collection. Lease termination amounts are paid by tenants who want to terminate their lease obligations before the end of the contractual term of the lease by agreement with us.
Effective October 1, 2020, we entered into a lease termination agreement with RGH Enterprises, Inc. (Cardinal Health) for our 75,000 square foot facility located in Halfmoon (Albany), NY, whereby we received a termination fee in the amount of $377,000 representing approximately 50% of the then remaining rent due under the lease, which was set to expire on November 30, 2021. We simultaneously entered into a 10.4 year lease agreement with United Parcel Service, Inc. (UPS) which became effective November 1, 2020. The lease agreement with UPS provides for five months of free rent, after which, on April 1, 2021, initial annual rent of $510,000, representing $ per square foot, commenced, with 2.0% annual increases thereafter, resulting in a straight-line annualized rent of $541,000, representing $ per square foot over the life of the lease, which expires March 31, 2031. This compares to the former U.S. GAAP straight-line rent of $574,000, representing $7.65 per square foot, and former cash rent of $8.19 per square foot, resulting in a decrease of $33,000, representing a 5.8% decrease on a U.S. GAAP straight-line basis and a decrease of 17.0% on a cash basis. The new 10.4 year lease agreement with UPS provides for an additional 9.3 years of lease term versus the old lease with Cardinal Health. In addition, effective June 4, 2021, we completed a parking lot expansion at this location for a cost of approximately $835,000 resulting in an initial increase in annual rent effective on the date of completion of approximately $52,000 from approximately $510,000, or $6.80 per square foot, to approximately $562,000, or $7.50 per square foot. Furthermore, annual rent will continue to increase each year by 2.0% resulting in an annualized rent from June 4, 2021 through the remaining term of the lease of approximately $622,000, or $8.29 per square foot.
Only fourthree of our 111122 properties have leases that contain an early termination provision. These fourthree properties contain approximately 184,000177,000 total rentable square feet, representing less than 1% of our total rentable square feet. Our leases with early termination provisions are our 26,340 square foot location in Ridgeland (Jackson), MS, our 36,27036,000 square foot location in Urbandale (Des Moines), IA, our 38,83339,000 square foot location in Rockford, IL, and our 83,000102,000 square foot location in Roanoke, VA.O’Fallon (St. Louis), MO. Each lease termination provision contains certain requirements that must be met in order to exercise each termination provision. These requirements include: the date termination can be exercised, the time frame that notice must be given by the tenant to us and the termination fee that would be required to be paid by the tenant to us. The total potential termination fee tofees that would be paidpayable to us from the fourthree tenants with leases that have a termination provision amounts to approximately $1,694,000.$1.5 million.
Basic Net Income (Loss) per Common Share is calculated by dividing Net Income (Loss) Attributable to Common Shareholders by the weighted-averageweighted average number of common shares outstanding during the period. Diluted Net Income (Loss) per Common Share is calculated by dividing Net Income (Loss) Attributable to Common Shareholders by the weighted-averageweighted average number of common shares outstanding plusfor the weighted-average number ofperiod and, when dilutive, the potential net shares that would be issued upon exercise of stock options pursuant to the treasury stock method. In periods with a net loss, the basic loss per share equals the diluted loss per share as all common stock equivalents are excluded from the per share calculation because they are anti-dilutive.
In addition, common stock equivalents of 182,768, 135,613 , and 89,720 shares are included in the diluted weighted average shares outstanding for fiscal years 2018, 20172021, 2020 and 2016,2019, respectively. As of September 30, 2018, 20172021, 2020 and 2016,2019, options to purchase , and -0- shares, respectively, were antidilutive.
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Stock Compensation Plan
We account for awards of stock, stock options and restricted stock in accordance with ASC 718-10, “Compensation-Stock Compensation”.Compensation.” ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period). The compensation cost for stock option grants is determined using option pricing models, intended to estimate the fair value of the awards at the grant date less estimated forfeitures. The compensation expense for restricted stock is recognized based on the fair value of the restricted stock awards less estimated forfeitures. The fair value of stock awards and restricted stock awards is equal to the fair value of our stock on the grant date. The amortization of compensation costs for the awards of stock, stock option grants and restricted stock are included in General and Administrative Expenses in the accompanying Consolidated Statements of Income and amounted to $433,895, $624,706$ , $ and $926,465$ have been recognized in 2018, 20172021, 2020 and 2016,2019, respectively. Included in Note 9 to these consolidated financial statements are the assumptions and methodology used to calculate the fair value of stock options and restricted shares.
Income Tax
We have elected to be taxed as a REIT under Sections 856-860 of the Code, and we intend to maintain our qualification as a REIT in the future. As a qualified REIT, with limited exceptions, we will not be taxed under Federal and certain state income tax laws at the corporate level on taxable income that we distribute to our shareholders. For special tax provisions applicable to REITs, refer to Sections 856-860 of the Code. We are subject to franchise taxes in several of the states in which we own properties.
In December 2017, the Tax Cuts and Jobs Act of 2017 (the TCJA), Code Section 199A, was added to the Code and became effective for tax years beginning after December 31, 2017 and before January 1, 2026. Under the TCJA, subject to certain income limitations, individual taxpayers and trusts and estates may deduct 20% of the aggregate amount of qualified REIT dividends they receive from their taxable income. Qualified REIT dividends do not include any portion of a dividend received from a REIT that is classified as a capital gain dividend or qualified dividend income.
We follow the provisions of ASC Topic 740, Income Taxes, that, among other things, defines a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Based on our evaluation, we determined that we have no uncertain tax positions and no unrecognized tax benefits as of September 30, 2018.2021. We record interest and penalties relating to unrecognized tax benefits, if any, as interest expense. As of September 30, 2018,2021, the fiscal tax years 20152018 through and including 20182021 remain open to examination by the Internal Revenue Service. There are currently no federal tax examinations in progress.
Comprehensive Income (Loss)
Comprehensive income (loss) is comprised of net income (loss) attributable to shareholders and other comprehensive income.income (loss). Other comprehensive income (loss) consists of the change in the fair value of an interest rate swap derivative. Prior to our adoption of Financial Accounting Standards Board’s (FASB) Accounting Standards Update (ASU) 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities” on October 1, 2018, other comprehensive income consisted of unrealized holding gains or losses arising during the period on securities available for sale, less any reclassification adjustments for net gains of sales of securities transactions realized in income. Once we adopted ASU 2016-01, the changes in net unrealized holding gains and losses were no longer recognized through other comprehensive income and instead these changes are now recognized through net income on our Consolidated Statements of Income (Loss).
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Reclassifications
Certain amounts in the consolidated financial statements for the prior years have been reclassified to conform to the financial statement presentation for the current year.
Recent Accounting Pronouncements
In February 2016,April 2020, FASB issued interpretive guidance relating to the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, “Leases”. ASU 2016-02 amendsaccounting for lease concessions provided as a result of the COVID-19 Pandemic that allows entities to treat the concession as if it was a part of the existing accounting standards forcontract instead of applying lease accounting, including requiring lesseesmodification accounting. This guidance is only applicable to recognize most leases on their balance sheetsthe COVID-19 Pandemic related lease concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. We have elected this option relating to qualifying rent deferral and making targeted changesrent abatement agreements. For qualifying lease modifications with rent deferrals, this results in no change to lessor accounting. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. ASU 2016-02 will become effective for annual reporting periods beginning after December 15, 2018. The most significant changes related to lessor accounting under ASU 2016-02 include bifurcating revenue into lease and non-lease components and the new standard’s narrow definition of initial direct costs for leases. Since our revenue is primarily derived from leasing activities from long-term net leases and since we currently do not capitalize indirect costs for leases, we believe that will continue to account for our leases and related leasing costs in substantially the same manner as we currently do once the adoption of the ASU 2016-02 becomes effective.
In July 2018, the FASB issued ASU 2018-10, “Codification Improvements to Topic 842, Leases”. The amendment in ASU 2018-10 affects narrow aspects of the guidance issued earlier in ASU 2016-02 by removing certain inconsistencies and providing additional clarification related to the guidance issued earlier. ASU 2018-10 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2018. We are currently evaluating the potential impact this standard may have on our consolidated financial statements.
In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes became effective for our fiscal year beginning October 1, 2018. The most significant change for us, once ASU 2016-01 was adopted, was the accounting treatment for our investments in marketable securities that are classified as available for sale. The accounting treatment used for our Consolidated Financial Statements through Fiscal 2018, was that our investments in marketable securities, classified as available for sale, were carried at fair value, with net unrealized holding gains and losses being excluded from earnings and reported as a separate component of Shareholders’ Equity until realized and the change in net unrealized holding gains and losses being reflected as comprehensive income (loss). Under ASU 2016-01, effective October 1, 2018, these marketable securities continue to be measured at fair value, however the changes in net unrealized holding gains and losses are now recognized through net income. Subsequent to the fiscal yearend, on October 1, 2018, unrealized net holding losses of $24,744,579 were reclassed to beginning retained earnings to recognize the unrealized losses previously recorded in “accumulated other comprehensive income” on our consolidated balance sheets.
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers, which requiresrecognition but an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers”. The FASB issued further guidance in ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients”, that provides clarifying guidance in certain narrow areas and adds some practical expedients. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The effective date of ASU 2014-09 was extended by one year by ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”. The new standard is effective for the first interim period within annual reporting periods beginning after December 15, 2017. Therefore, we adopted the standard effective October 1, 2018. Our revenue is primarily derived from leasing activities and historically our property dispositions have been cash sales with no contingencies and no future involvementincrease in the property. Sincelease receivable balance until the deferred rent has been repaid. For qualifying lease modifications that include rent abatement concessions, this standard applies to all contracts with customers except those that are withinresults in a direct reduction of rental income in the scope of other guidance, such as leases, the adoption of this standard did not have a significant impact on our consolidated financial statements and related disclosures.current period.
We do not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying Consolidated Financial Statements.
NOTE 2 – REAL ESTATE INVESTMENTS
The following is a summary of the cost and accumulated depreciation of our land, buildings and improvements at September 30, 20182021 and 2017:2020 (in thousands):
SCHEDULE OF REAL ESTATE INVESTMENTS
Property | Buildings & | Accumulated | Net Book | Property | Buildings & | Accumulated | Net Book | |||||||||||||||||||||||||||||||
SEPTEMBER 30, 2018 | Type | Land | Improvements | Depreciation | Value | |||||||||||||||||||||||||||||||||
SEPTEMBER 30, 2021 | Type | Land | Improvements | Depreciation | Value | |||||||||||||||||||||||||||||||||
Alabama: | ||||||||||||||||||||||||||||||||||||||
Huntsville | Industrial | $ | 748,115 | $ | 5,913,696 | $ | 1,249,093 | $ | 5,412,718 | Industrial | $ | 748 | $ | 5,914 | $ | 1,714 | $ | 4,948 | ||||||||||||||||||||
Mobile | Industrial | 2,480,474 | 30,571,842 | 195,973 | 32,856,343 | Industrial | 2,480 | 30,572 | 2,548 | 30,504 | ||||||||||||||||||||||||||||
Arizona: | ||||||||||||||||||||||||||||||||||||||
Tolleson (Phoenix) | Industrial | 1,316,075 | 15,508,151 | 6,144,623 | 10,679,603 | Industrial | 1,316 | 15,508 | 7,674 | 9,150 | ||||||||||||||||||||||||||||
Colorado: | ||||||||||||||||||||||||||||||||||||||
Colorado Springs | Industrial | 2,150,000 | 27,170,066 | 1,593,580 | 27,726,486 | Industrial | 2,150 | 27,170 | 3,744 | 25,576 | ||||||||||||||||||||||||||||
Denver | Industrial | 1,150,000 | 5,204,051 | 1,704,122 | 4,649,929 | Industrial | 1,150 | 5,224 | 2,108 | 4,266 | ||||||||||||||||||||||||||||
Connecticut: | ||||||||||||||||||||||||||||||||||||||
Newington (Hartford) | Industrial | 410,000 | 3,084,108 | 1,377,254 | 2,116,854 | Industrial | 410 | 3,116 | 1,635 | 1,891 | ||||||||||||||||||||||||||||
Florida: | ||||||||||||||||||||||||||||||||||||||
Cocoa | Industrial | 1,881,316 | 12,246,133 | 2,758,147 | 11,369,302 | Industrial | 1,881 | 12,246 | 3,725 | 10,402 | ||||||||||||||||||||||||||||
Davenport (Orlando) | Industrial | 7,060,000 | 30,720,000 | 1,706,667 | 36,073,333 | Industrial | 7,060 | 31,027 | 4,094 | 33,993 | ||||||||||||||||||||||||||||
Daytona Beach | Industrial | 3,119,640 | 26,853,559 | 344,276 | 29,628,923 | Industrial | 3,120 | 27,754 | 2,454 | 28,420 | ||||||||||||||||||||||||||||
Ft. Myers (FDX Ground) | Industrial | 2,486,417 | 19,177,218 | 842,928 | 20,820,707 | |||||||||||||||||||||||||||||||||
Ft. Myers | Industrial | 2,486 | 19,198 | 2,312 | 19,372 | |||||||||||||||||||||||||||||||||
Homestead (Miami) | Industrial | 4,426,727 | 33,446,393 | 1,072,000 | 36,801,120 | Industrial | 4,427 | 33,485 | 3,656 | 34,256 | ||||||||||||||||||||||||||||
Jacksonville (FDX) | Industrial | 1,165,000 | 5,231,958 | 2,619,003 | 3,777,955 | Industrial | 1,165 | 5,419 | 3,159 | 3,425 | ||||||||||||||||||||||||||||
Jacksonville (FDX Ground) | Industrial | 6,000,000 | 24,735,702 | 2,323,375 | 28,412,327 | Industrial | 6,000 | 24,926 | 4,305 | 26,621 | ||||||||||||||||||||||||||||
Lakeland | Industrial | 261,000 | 1,782,226 | 573,621 | 1,469,605 | Industrial | 261 | 1,782 | 724 | 1,319 | ||||||||||||||||||||||||||||
Orlando | Industrial | 2,200,000 | 6,574,524 | 1,830,818 | 6,943,706 | Industrial | 2,200 | 6,610 | 2,405 | 6,405 | ||||||||||||||||||||||||||||
Punta Gorda | Industrial | -0- | 4,133,510 | 1,058,498 | 3,075,012 | Industrial | 0 | 4,134 | 1,398 | 2,736 | ||||||||||||||||||||||||||||
Tampa (FDX Ground) | Industrial | 5,000,000 | 14,701,575 | 4,921,899 | 14,779,676 | Industrial | 5,000 | 14,745 | 6,059 | 13,686 | ||||||||||||||||||||||||||||
Tampa (FDX) | Industrial | 2,830,000 | 5,027,120 | 1,515,388 | 6,341,732 | Industrial | 2,830 | 5,518 | 2,004 | 6,344 | ||||||||||||||||||||||||||||
Tampa (Tampa Bay Grand Prix) | Industrial | 1,867,000 | 3,810,982 | 1,144,249 | 4,533,733 | Industrial | 1,867 | 3,811 | 1,448 | 4,230 | ||||||||||||||||||||||||||||
Georgia: | ||||||||||||||||||||||||||||||||||||||
Augusta (FDX Ground) | Industrial | 614,406 | 4,748,899 | 1,509,465 | 3,853,840 | Industrial | 614 | 4,749 | 1,878 | 3,485 | ||||||||||||||||||||||||||||
Augusta (FDX) | Industrial | 380,000 | 1,597,779 | 463,245 | 1,514,534 | Industrial | 380 | 1,613 | 602 | 1,391 | ||||||||||||||||||||||||||||
Braselton (Atlanta) | Industrial | 13,964,652 | 46,262,482 | 98,855 | 60,128,279 | Industrial | 13,965 | 46,273 | 3,659 | 56,579 | ||||||||||||||||||||||||||||
Griffin (Atlanta) | Industrial | 760,000 | 14,173,683 | 4,493,178 | 10,440,505 | Industrial | 760 | 14,322 | 5,716 | 9,366 | ||||||||||||||||||||||||||||
Savannah | Industrial | 4,404,988 | 51,620,957 | 882,410 | 55,143,535 | |||||||||||||||||||||||||||||||||
Illinois: | ||||||||||||||||||||||||||||||||||||||
Burr Ridge (Chicago) | Industrial | 270,000 | 1,422,901 | 741,290 | 951,611 | |||||||||||||||||||||||||||||||||
Elgin (Chicago) | Industrial | 1,280,000 | 5,697,442 | 2,436,368 | 4,541,074 | |||||||||||||||||||||||||||||||||
Granite City (St. Louis, MO) | Industrial | 340,000 | 12,357,848 | 5,183,974 | 7,513,874 | |||||||||||||||||||||||||||||||||
Montgomery (Chicago) | Industrial | 2,000,000 | 9,303,317 | 2,761,952 | 8,541,365 | |||||||||||||||||||||||||||||||||
Rockford (Collins Aerospace) | Industrial | 480,000 | 4,620,000 | 473,846 | 4,626,154 | |||||||||||||||||||||||||||||||||
Rockford (Sherwin-Williams Co.) | Industrial | 1,100,000 | 4,451,227 | 859,960 | 4,691,267 | |||||||||||||||||||||||||||||||||
Sauget (St. Louis, MO) | Industrial | 1,890,000 | 13,314,950 | 1,366,159 | 13,838,791 | |||||||||||||||||||||||||||||||||
Schaumburg (Chicago) | Industrial | 1,039,800 | 4,138,140 | 2,283,345 | 2,894,595 | |||||||||||||||||||||||||||||||||
Wheeling (Chicago) | Industrial | 5,112,120 | 13,870,354 | 4,430,770 | 14,551,704 | |||||||||||||||||||||||||||||||||
Indiana: | ||||||||||||||||||||||||||||||||||||||
Greenwood (Indianapolis) | Industrial | 2,250,000 | 35,262,071 | 3,091,837 | 34,420,234 | |||||||||||||||||||||||||||||||||
Indianapolis | Industrial | 3,745,572 | 21,758,510 | 2,239,839 | 23,264,243 | |||||||||||||||||||||||||||||||||
Locust Grove (Atlanta) | Industrial | 9,667 | 83,569 | 1,607 | 91,629 |
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Property | Buildings & | Accumulated | Net Book | |||||||||||||||
SEPTEMBER 30, 2018 (cont’d) | Type | Land | Improvements | Depreciation | Value | |||||||||||||
Iowa: | ||||||||||||||||||
Urbandale (Des Moines) | Industrial | $ | 310,000 | $ | 2,213,644 | $ | 1,211,364 | $ | 1,312,280 | |||||||||
Kansas: | ||||||||||||||||||
Edwardsville (Kansas City) (Carlisle Tire) | Industrial | 1,185,000 | 6,047,986 | 2,538,608 | 4,694,378 | |||||||||||||
Edwardsville (Kansas City) (International Paper) | Industrial | 2,750,000 | 15,544,108 | 2,001,778 | 16,292,330 | |||||||||||||
Olathe (Kansas City) | Industrial | 2,350,000 | 29,387,000 | 1,632,611 | 30,104,389 | |||||||||||||
Topeka | Industrial | -0- | 3,679,843 | 896,483 | 2,783,360 | |||||||||||||
Kentucky: | ||||||||||||||||||
Buckner (Louisville) | Industrial | 2,280,000 | 24,527,852 | 3,114,323 | 23,693,529 | |||||||||||||
Frankfort (Lexington) | Industrial | 1,850,000 | 26,150,000 | 2,570,299 | 25,429,701 | |||||||||||||
Louisville | Industrial | 1,590,000 | 9,714,000 | 581,179 | 10,722,821 | |||||||||||||
Louisiana: | ||||||||||||||||||
Covington (New Orleans) | Industrial | 2,720,000 | 15,690,000 | 1,139,872 | 17,270,128 | |||||||||||||
Maryland: | ||||||||||||||||||
Beltsville (Washington, DC) | Industrial | 3,200,000 | 11,312,355 | 4,151,339 | 10,361,016 | |||||||||||||
Michigan: | ||||||||||||||||||
Walker (Grand Rapids) | Industrial | 4,034,363 | 27,620,623 | 1,062,332 | 30,592,654 | |||||||||||||
Livonia (Detroit) | Industrial | 320,000 | 13,442,030 | 2,046,869 | 11,715,161 | |||||||||||||
Orion | Industrial | 4,649,971 | 18,240,153 | 4,488,942 | 18,401,182 | |||||||||||||
Romulus (Detroit) | Industrial | 531,000 | 4,201,671 | 2,043,189 | 2,689,482 | |||||||||||||
Minnesota: | ||||||||||||||||||
Stewartville (Rochester) | Industrial | 900,000 | 4,320,000 | 553,846 | 4,666,154 | |||||||||||||
Mississippi: | ||||||||||||||||||
Olive Branch (Memphis, TN)(Anda Pharmaceuticals, Inc.) | Industrial | 800,000 | 13,750,000 | 2,203,526 | 12,346,474 | |||||||||||||
Olive Branch (Memphis, TN)(Milwaukee Tool) | Industrial | 2,550,000 | 34,364,917 | 4,044,199 | 32,870,718 | |||||||||||||
Richland (Jackson) | Industrial | 211,000 | 1,689,691 | 982,066 | 918,625 | |||||||||||||
Ridgeland (Jackson) | Industrial | 218,000 | 1,667,254 | 1,313,173 | 572,081 | |||||||||||||
Missouri: | ||||||||||||||||||
Kansas City (Bunzl) | Industrial | 1,000,000 | 8,980,250 | 885,643 | 9,094,607 | |||||||||||||
Liberty (Kansas City) | Industrial | 723,000 | 6,674,881 | 3,497,982 | 3,899,899 | |||||||||||||
O’Fallon (St. Louis) | Industrial | 264,000 | 3,981,913 | 2,361,768 | 1,884,145 | |||||||||||||
St. Joseph | Industrial | 800,000 | 12,563,648 | 5,452,138 | 7,911,510 | |||||||||||||
Nebraska: | ||||||||||||||||||
Omaha | Industrial | 1,170,000 | 4,774,691 | 2,358,451 | 3,586,240 | |||||||||||||
New Jersey: | ||||||||||||||||||
Carlstadt (New York, NY) | Industrial | 1,194,000 | 3,748,402 | 1,029,584 | 3,912,818 | |||||||||||||
Somerset | Shopping Center | 34,317 | 3,077,460 | 1,589,653 | 1,522,124 | |||||||||||||
New York: | ||||||||||||||||||
Cheektowaga (Buffalo) | Industrial | 4,796,765 | 6,164,058 | 1,851,798 | 9,109,025 | |||||||||||||
Halfmoon (Albany) | Industrial | 1,190,000 | 4,335,600 | 722,600 | 4,803,000 | |||||||||||||
Hamburg (Buffalo) | Industrial | 1,700,000 | 33,150,000 | 1,700,000 | 33,150,000 | |||||||||||||
North Carolina: | ||||||||||||||||||
Concord (Charlotte) | Industrial | 4,305,000 | 28,739,797 | 2,314,361 | 30,730,436 | |||||||||||||
Concord (Charlotte) | Industrial | 4,306,684 | 35,736,461 | 1,069,039 | 38,974,106 | |||||||||||||
Fayetteville | Industrial | 172,000 | 5,279,629 | 2,931,202 | 2,520,427 | |||||||||||||
Winston-Salem | Industrial | 980,000 | 6,266,326 | 2,617,877 | 4,628,449 | |||||||||||||
Ohio: | ||||||||||||||||||
Bedford Heights (Cleveland) | Industrial | 990,000 | 5,929,836 | 1,893,515 | 5,026,321 | |||||||||||||
Cincinnati | Industrial | 800,000 | 5,950,000 | 470,406 | 6,279,594 | |||||||||||||
Kenton | Industrial | 854,780 | 17,026,827 | 454,776 | 17,426,831 | |||||||||||||
Lebanon (Cincinnati) | Industrial | 240,000 | 4,212,425 | 704,125 | 3,748,300 | |||||||||||||
Monroe (Cincinnati) | Industrial | 1,800,000 | 15,724,760 | 1,023,271 | 16,501,489 | |||||||||||||
Richfield (Cleveland) | Industrial | 2,676,848 | 13,770,330 | 3,083,114 | 13,364,064 |
Property | Buildings & | Accumulated | Net Book | |||||||||||||||
SEPTEMBER 30, 2021 (cont’d) | Type | Land | Improvements | Depreciation | Value | |||||||||||||
Savannah (Shaw) | Industrial | $ | 4,405 | $ | 51,621 | $ | 4,853 | $ | 51,173 | |||||||||
Savannah (FDX Ground) | Industrial | 3,441 | 24,091 | 1,750 | 25,782 | |||||||||||||
Illinois: | ||||||||||||||||||
Burr Ridge (Chicago) | Industrial | 270 | 1,615 | 869 | 1,016 | |||||||||||||
Elgin (Chicago) | Industrial | 1,280 | 5,902 | 2,984 | 4,198 | |||||||||||||
Granite City (St. Louis, MO) | Industrial | 340 | 12,418 | 6,252 | 6,506 | |||||||||||||
Montgomery (Chicago) | Industrial | 2,000 | 9,303 | 3,484 | 7,819 | |||||||||||||
Rockford (Collins Aerospace Systems) | Industrial | 480 | 4,620 | 829 | 4,271 | |||||||||||||
Rockford (Sherwin-Williams Co.) | Industrial | 1,100 | 4,451 | 1,206 | 4,345 | |||||||||||||
Sauget (St. Louis, MO) | Industrial | 1,890 | 15,519 | 2,391 | 15,018 | |||||||||||||
Schaumburg (Chicago) | Industrial | 1,040 | 4,407 | 2,671 | 2,776 | |||||||||||||
Wheeling (Chicago) | Industrial | 5,112 | 14,513 | 5,600 | 14,025 | |||||||||||||
Indiana: | ||||||||||||||||||
Greenwood (Indianapolis) (ULTA) | Industrial | 2,250 | 35,524 | 5,828 | 31,946 | |||||||||||||
Greenwood (Indianapolis) (Amazon) | Industrial | 4,839 | 74,525 | 3,822 | 75,542 | |||||||||||||
Indianapolis (FDX Ground) | Industrial | 3,746 | 21,758 | 4,009 | 21,495 | |||||||||||||
Lafayette | Industrial | 2,802 | 22,277 | 1,238 | 23,841 | |||||||||||||
Iowa: | ||||||||||||||||||
Urbandale (Des Moines) | Industrial | 310 | 2,234 | 1,459 | 1,085 | |||||||||||||
Kansas: | ||||||||||||||||||
Edwardsville (Kansas City) (Carlstar Group) | Industrial | 1,185 | 6,098 | 3,014 | 4,269 | |||||||||||||
Edwardsville (Kansas City) (International Paper) | Industrial | 2,750 | 15,544 | 3,245 | 15,049 | |||||||||||||
Olathe (Kansas City) | Industrial | 3,616 | 31,831 | 3,960 | 31,487 | |||||||||||||
Topeka | Industrial | 0 | 3,680 | 1,179 | 2,501 | |||||||||||||
Kentucky: | ||||||||||||||||||
Buckner (Louisville) | Industrial | 2,280 | 24,528 | 5,039 | 21,769 | |||||||||||||
Frankfort (Lexington) | Industrial | 1,850 | 26,150 | 4,582 | 23,418 | |||||||||||||
Louisville | Industrial | 1,590 | 9,714 | 1,328 | 9,976 | |||||||||||||
Louisiana: | ||||||||||||||||||
Covington (New Orleans) | Industrial | 2,720 | 15,706 | 2,352 | 16,074 | |||||||||||||
Maryland: | ||||||||||||||||||
Beltsville (Washington, DC) | Industrial | 3,200 | 11,521 | 5,045 | 9,676 | |||||||||||||
Michigan: | ||||||||||||||||||
Walker (Grand Rapids) | Industrial | 4,034 | 27,621 | 3,187 | 28,468 | |||||||||||||
Livonia (Detroit) | Industrial | 320 | 13,568 | 3,127 | 10,761 | |||||||||||||
Orion | Industrial | 4,650 | 18,506 | 5,902 | 17,254 | |||||||||||||
Romulus (Detroit) | Industrial | 531 | 4,418 | 2,477 | 2,472 | |||||||||||||
Minnesota: | ||||||||||||||||||
Stewartville (Rochester) | Industrial | 900 | 4,332 | 888 | 4,344 | |||||||||||||
Mississippi: | ||||||||||||||||||
Olive Branch (Memphis, TN) (Anda Pharmaceuticals, Inc.) | Industrial | 800 | 13,750 | 3,261 | 11,289 | |||||||||||||
Olive Branch (Memphis, TN) (Milwaukee Tool) | Industrial | 2,550 | 34,365 | 6,697 | 30,218 | |||||||||||||
Richland (Jackson) | Industrial | 211 | 1,690 | 1,200 | 701 | |||||||||||||
Ridgeland (Jackson) | Industrial | 218 | 2,738 | 1,585 | 1,371 | |||||||||||||
Missouri: | ||||||||||||||||||
Kansas City | Industrial | 1,000 | 9,003 | 1,670 | 8,333 | |||||||||||||
Liberty (Kansas City) | Industrial | 724 | 7,075 | 4,128 | 3,671 | |||||||||||||
O’Fallon (St. Louis) | Industrial | 264 | 3,986 | 2,735 | 1,515 | |||||||||||||
St. Joseph | Industrial | 800 | 12,705 | 6,518 | 6,987 | |||||||||||||
Nebraska: | ||||||||||||||||||
Omaha | Industrial | 1,170 | 4,794 | 2,734 | 3,230 | |||||||||||||
New Jersey: | ||||||||||||||||||
Somerset | Shopping Center | 35 | 3,104 | 1,873 | 1,266 | |||||||||||||
Trenton | Industrial | 8,336 | 75,652 | 5,819 | 78,169 |
79 |
Property | Buildings & | Accumulated | Net Book | |||||||||||||||
SEPTEMBER 30, 2018 (cont’d) | Type | Land | Improvements | Depreciation | Value | |||||||||||||
Stow | Industrial | $ | 1,429,715 | $ | 17,504,350 | $ | 448,829 | $ | 18,485,236 | |||||||||
Streetsboro (Cleveland) | Industrial | 1,760,000 | 17,840,000 | 2,973,333 | 16,626,667 | |||||||||||||
West Chester Twp. (Cincinnati) | Industrial | 695,000 | 5,038,686 | 2,305,181 | 3,428,505 | |||||||||||||
Oklahoma: | ||||||||||||||||||
Oklahoma City (FDX Ground) | Industrial | 1,410,000 | 11,174,462 | 1,599,042 | 10,985,420 | |||||||||||||
Oklahoma City (Bunzl) | Industrial | 844,688 | 7,883,751 | 252,684 | 8,475,755 | |||||||||||||
Oklahoma City (Amazon) | Industrial | 1,618,240 | 28,260,702 | 603,861 | 29,275,081 | |||||||||||||
Tulsa | Industrial | 790,000 | 2,958,031 | 391,119 | 3,356,912 | |||||||||||||
Pennsylvania: | ||||||||||||||||||
Altoona | Industrial | 1,200,000 | 7,822,966 | 986,269 | 8,036,697 | |||||||||||||
Imperial (Pittsburgh) | Industrial | 3,700,000 | 16,250,000 | 1,076,389 | 18,873,611 | |||||||||||||
Monaca (Pittsburgh) | Industrial | 401,716 | 7,508,950 | 2,957,471 | 4,953,195 | |||||||||||||
South Carolina: | ||||||||||||||||||
Aiken (Augusta, GA) | Industrial | 1,362,458 | 19,677,937 | 630,703 | 20,409,692 | |||||||||||||
Charleston (FDX) | Industrial | 4,639,283 | 16,880,128 | 397,072 | 21,122,339 | |||||||||||||
Charleston (FDX Ground) | Industrial | 7,103,106 | 39,473,274 | 168,689 | 46,407,691 | |||||||||||||
Ft. Mill (Charlotte, NC) | Industrial | 1,746,822 | 15,327,214 | 2,654,658 | 14,419,378 | |||||||||||||
Hanahan (Charleston)(SAIC) | Industrial | 1,129,000 | 12,281,102 | 4,343,346 | 9,066,756 | |||||||||||||
Hanahan (Charleston)(FDX Ground) | Industrial | 930,000 | 6,684,653 | 2,071,138 | 5,543,515 | |||||||||||||
Tennessee: | ||||||||||||||||||
Chattanooga | Industrial | 300,000 | 4,838,540 | 1,388,863 | 3,749,677 | |||||||||||||
Lebanon (Nashville) | Industrial | 2,230,000 | 11,985,126 | 2,151,164 | 12,063,962 | |||||||||||||
Memphis | Industrial | 1,234,987 | 13,380,000 | 2,916,162 | 11,698,825 | |||||||||||||
Shelby County | Vacant Land | 11,065 | -0- | -0- | 11,065 | |||||||||||||
Texas: | ||||||||||||||||||
Carrollton (Dallas) | Industrial | 1,500,000 | 16,319,203 | 3,555,283 | 14,263,920 | |||||||||||||
Corpus Christi | Industrial | -0- | 4,808,330 | 797,350 | 4,010,980 | |||||||||||||
Edinburg | Industrial | 1,000,000 | 11,039,014 | 1,472,631 | 10,566,383 | |||||||||||||
El Paso | Industrial | 3,225,195 | 9,205,997 | 1,977,282 | 10,453,910 | |||||||||||||
Ft. Worth (Dallas) | Industrial | 8,200,000 | 27,100,832 | 2,200,495 | 33,100,337 | |||||||||||||
Houston | Industrial | 1,661,120 | 6,502,158 | 1,440,389 | 6,722,889 | |||||||||||||
Lindale (Tyler) | Industrial | 540,000 | 9,425,550 | 966,498 | 8,999,052 | |||||||||||||
Mesquite (Dallas) | Industrial | 6,247,658 | 43,632,835 | 1,398,488 | 48,482,005 | |||||||||||||
Spring (Houston) | Industrial | 1,890,000 | 17,404,396 | 2,077,166 | 17,217,230 | |||||||||||||
Waco | Industrial | 1,350,000 | 11,201,368 | 1,498,728 | 11,052,640 | |||||||||||||
Virginia: | ||||||||||||||||||
Charlottesville | Industrial | 1,170,000 | 3,285,702 | 1,588,202 | 2,867,500 | |||||||||||||
Mechanicsville (Richmond) | Industrial | 1,160,000 | 6,632,395 | 3,007,443 | 4,784,952 | |||||||||||||
Richmond | Industrial | 446,000 | 4,322,309 | 1,545,670 | 3,222,639 | |||||||||||||
Roanoke (CHEP USA) | Industrial | 1,853,000 | 5,610,672 | 1,706,454 | 5,757,218 | |||||||||||||
Roanoke (FDX Ground) | Industrial | 1,740,000 | 8,460,000 | 1,147,885 | 9,052,115 | |||||||||||||
Washington: | ||||||||||||||||||
Burlington (Seattle/Everett) | Industrial | 8,000,000 | 22,228,547 | 1,426,792 | 28,801,755 | |||||||||||||
Wisconsin: | ||||||||||||||||||
Cudahy (Milwaukee) | Industrial | 980,000 | 8,786,361 | 3,296,930 | 6,469,431 | |||||||||||||
Green Bay | Industrial | 590,000 | 5,980,000 | 766,667 | 5,803,333 | |||||||||||||
Total as of September 30, 2018 | $ | 224,719,083 | $ | 1,494,859,336 | $ | 207,065,634 | $ | 1,512,512,785 |
Property | Buildings & | Accumulated | Net Book | |||||||||||||||
SEPTEMBER 30, 2021 (cont’d) | Type | Land | Improvements | Depreciation | Value | |||||||||||||
New York: | ||||||||||||||||||
Cheektowaga (Buffalo) | Industrial | $ | 4,797 | $ | 6,164 | $ | 2,330 | $ | 8,631 | |||||||||
Halfmoon (Albany) | Industrial | 1,190 | 5,551 | 1,134 | 5,607 | |||||||||||||
Hamburg (Buffalo) | Industrial | 1,700 | 33,440 | 4,313 | 30,827 | |||||||||||||
North Carolina: | ||||||||||||||||||
Concord I (Charlotte) | Industrial | 4,305 | 28,749 | 4,847 | 28,207 | |||||||||||||
Concord II (Charlotte) | Industrial | 4,307 | 35,736 | 3,818 | 36,225 | |||||||||||||
Fayetteville | Industrial | 172 | 5,286 | 3,532 | 1,926 | |||||||||||||
Whitsett (Greensboro) | Industrial | 2,735 | 43,976 | 1,503 | 45,208 | |||||||||||||
Winston-Salem | Industrial | 980 | 6,447 | 3,239 | 4,188 | |||||||||||||
Ohio: | ||||||||||||||||||
Bedford Heights (Cleveland) | Industrial | 990 | 6,314 | 2,530 | 4,774 | |||||||||||||
Cincinnati | Industrial | 800 | 5,950 | 928 | 5,822 | |||||||||||||
Lancaster (Columbus) | Industrial | 959 | 16,599 | 638 | 16,920 | |||||||||||||
Kenton | Industrial | 855 | 17,876 | 1,970 | 16,761 | |||||||||||||
Lebanon (Cincinnati) | Industrial | 240 | 4,315 | 1,069 | 3,486 | |||||||||||||
Monroe (Cincinnati) | Industrial | 1,800 | 19,777 | 2,452 | 19,125 | |||||||||||||
Plain City (Columbus) | Industrial | 6,554 | 65,187 | 1,254 | 70,487 | |||||||||||||
Richfield (Cleveland) | Industrial | 2,677 | 13,960 | 4,156 | 12,481 | |||||||||||||
Stow | Industrial | 1,430 | 17,504 | 1,795 | 17,139 | |||||||||||||
Streetsboro (Cleveland) | Industrial | 1,760 | 17,840 | 4,346 | 15,254 | |||||||||||||
West Chester Twp. (Cincinnati) | Industrial | 695 | 5,039 | 2,842 | 2,892 | |||||||||||||
Oklahoma: | ||||||||||||||||||
Oklahoma City (FDX Ground) | Industrial | 1,410 | 11,215 | 2,479 | 10,146 | |||||||||||||
Oklahoma City (Bunzl) | Industrial | 845 | 7,883 | 859 | 7,869 | |||||||||||||
Oklahoma City (Amazon) | Industrial | 1,618 | 28,260 | 2,778 | 27,100 | |||||||||||||
Oklahoma City (Amazon II) | Industrial | 1,378 | 13,584 | 363 | 14,599 | |||||||||||||
Tulsa | Industrial | 790 | 2,958 | 631 | 3,117 | |||||||||||||
Pennsylvania: | ||||||||||||||||||
Altoona | Industrial | 1,200 | 7,823 | 1,595 | 7,428 | |||||||||||||
Imperial (Pittsburgh) | Industrial | 3,700 | 16,290 | 2,331 | 17,659 | |||||||||||||
Monaca (Pittsburgh) | Industrial | 402 | 7,562 | 3,730 | 4,234 | |||||||||||||
South Carolina: | ||||||||||||||||||
Aiken (Augusta, GA) | Industrial | 1,362 | 19,678 | 2,144 | 18,896 | |||||||||||||
Charleston (FDX) | Industrial | 4,639 | 16,900 | 1,703 | 19,836 | |||||||||||||
Charleston (FDX Ground) | Industrial | 7,103 | 39,473 | 3,205 | 43,371 | |||||||||||||
Ft. Mill (Charlotte, NC) | Industrial | 1,747 | 15,317 | 3,826 | 13,238 | |||||||||||||
Hanahan (Charleston) (SAIC) | Industrial | 1,129 | 13,334 | 5,791 | 8,672 | |||||||||||||
Hanahan (Charleston) (Amazon) | Industrial | 930 | 8,376 | 2,852 | 6,454 | |||||||||||||
Tennessee: | ||||||||||||||||||
Chattanooga | Industrial | 300 | 5,069 | 1,827 | 3,542 | |||||||||||||
Kodak (Knoxville) | Industrial | 2,918 | 30,972 | 66 | 33,824 | |||||||||||||
Lebanon (Nashville) | Industrial | 2,230 | 11,985 | 3,073 | 11,142 | |||||||||||||
Memphis | Industrial | 1,235 | 14,858 | 4,278 | 11,815 | |||||||||||||
Shelby County | Vacant Land | 11 | 0 | 0 | 11 | |||||||||||||
Texas: | ||||||||||||||||||
Carrollton (Dallas) | Industrial | 1,500 | 16,997 | 4,908 | 13,589 | |||||||||||||
Corpus Christi | Industrial | 0 | 4,808 | 1,176 | 3,632 | |||||||||||||
Edinburg | Industrial | 1,000 | 11,039 | 2,324 | 9,715 | |||||||||||||
El Paso | Industrial | 3,225 | 9,206 | 2,780 | 9,651 | |||||||||||||
Ft. Worth (Dallas) | Industrial | 8,200 | 27,448 | 4,358 | 31,290 | |||||||||||||
Houston | Industrial | 1,661 | 6,560 | 2,019 | 6,202 | |||||||||||||
Lindale (Tyler) | Industrial | 948 | 11,355 | 1,699 | 10,604 | |||||||||||||
Mesquite (Dallas) | Industrial | 6,248 | 43,632 | 4,755 | 45,125 | |||||||||||||
Spring (Houston) | Industrial | 1,890 | 17,439 | 3,432 | 15,897 | |||||||||||||
Waco | Industrial | 1,350 | 11,201 | 2,363 | 10,188 | |||||||||||||
Utah: | ||||||||||||||||||
Ogden (Salt Lake City) | Industrial | 1,287 | 11,380 | 389 | 12,278 |
80 |
Property | Buildings & | Accumulated | Net Book | |||||||||||||||
SEPTEMBER 30, 2017 | Type | Land | Improvements | Depreciation | Value | |||||||||||||
Alabama: | ||||||||||||||||||
Huntsville | Industrial | $ | 748,115 | $ | 5,913,696 | $ | 1,092,730 | $ | 5,569,081 | |||||||||
Arizona: | ||||||||||||||||||
Tolleson (Phoenix) | Industrial | 1,316,075 | 15,508,151 | 5,634,312 | 11,189,914 | |||||||||||||
Colorado: | ||||||||||||||||||
Colorado Springs (1) | Industrial | 1,270,000 | 5,934,472 | 1,644,190 | 5,560,282 | |||||||||||||
Colorado Springs | Industrial | 2,150,000 | 26,350,000 | 900,855 | 27,599,145 | |||||||||||||
Denver | Industrial | 1,150,000 | 5,204,051 | 1,570,819 | 4,783,232 | |||||||||||||
Connecticut: | ||||||||||||||||||
Newington (Hartford) | Industrial | 410,000 | 3,084,108 | 1,288,391 | 2,205,717 | |||||||||||||
Florida: | ||||||||||||||||||
Cocoa | Industrial | 1,881,316 | 12,246,133 | 2,435,695 | 11,691,754 | |||||||||||||
Davenport (Orlando) | Industrial | 7,060,000 | 30,720,000 | 918,974 | 36,861,026 | |||||||||||||
Ft. Myers (Vacant) (1) | Industrial | 1,910,000 | 3,107,448 | 1,057,915 | 3,959,533 | |||||||||||||
Ft. Myers (FDX Ground) | Industrial | 2,400,000 | 19,223,000 | 353,846 | 21,269,154 | |||||||||||||
Homestead (Miami) | Industrial | 4,426,727 | 33,446,393 | 214,400 | 37,658,720 | |||||||||||||
Jacksonville (FDX) | Industrial | 1,165,000 | 5,164,784 | 2,450,615 | 3,879,169 | |||||||||||||
Jacksonville (FDX Ground) | Industrial | 6,000,000 | 24,732,090 | 1,688,236 | 29,043,854 | |||||||||||||
Lakeland | Industrial | 261,000 | 1,721,532 | 525,151 | 1,457,381 | |||||||||||||
Orlando | Industrial | 2,200,000 | 6,354,432 | 1,636,085 | 6,918,347 | |||||||||||||
Punta Gorda | Industrial | -0- | 4,133,510 | 945,236 | 3,188,274 | |||||||||||||
Tampa (FDX Ground) | Industrial | 5,000,000 | 14,696,227 | 4,544,868 | 15,151,359 | |||||||||||||
Tampa (FDX) | Industrial | 2,830,000 | 4,789,924 | 1,383,938 | 6,235,986 | |||||||||||||
Tampa (Tampa Bay Grand Prix) | Industrial | 1,867,000 | 3,810,982 | 1,043,048 | 4,634,934 | |||||||||||||
Georgia: | ||||||||||||||||||
Augusta (FDX Ground) | Industrial | 614,406 | 4,748,899 | 1,385,556 | 3,977,749 | |||||||||||||
Augusta (FDX) | Industrial | 380,000 | 1,597,779 | 415,251 | 1,562,528 | |||||||||||||
Griffin (Atlanta) | Industrial | 760,000 | 14,108,857 | 4,128,872 | 10,739,985 | |||||||||||||
Illinois: | ||||||||||||||||||
Burr Ridge (Chicago) | Industrial | 270,000 | 1,422,901 | 698,725 | 994,176 | |||||||||||||
Elgin (Chicago) | Industrial | 1,280,000 | 5,697,442 | 2,284,344 | 4,693,098 | |||||||||||||
Granite City (St. Louis, MO) | Industrial | 340,000 | 12,357,848 | 4,834,280 | 7,863,568 | |||||||||||||
Montgomery (Chicago) | Industrial | 2,000,000 | 9,298,367 | 2,522,213 | 8,776,154 | |||||||||||||
Rockford (Collins Aerospace Systems) | Industrial | 480,000 | 4,620,000 | 355,385 | 4,744,615 | |||||||||||||
Rockford (Sherwin-Williams Co.) | Industrial | 1,100,000 | 4,451,227 | 744,286 | 4,806,941 | |||||||||||||
Sauget (St. Louis, MO) | Industrial | 1,890,000 | 13,314,950 | 1,024,382 | 14,180,568 | |||||||||||||
Schaumburg (Chicago) | Industrial | 1,039,800 | 4,138,140 | 2,159,563 | 3,018,377 | |||||||||||||
Wheeling (Chicago) | Industrial | 5,112,120 | 13,425,532 | 4,079,587 | 14,458,065 | |||||||||||||
Indiana: | ||||||||||||||||||
Greenwood (Indianapolis) | Industrial | 2,250,000 | 35,262,071 | 2,186,221 | 35,325,850 | |||||||||||||
Indianapolis | Industrial | 3,739,030 | 21,267,342 | 1,657,124 | 23,349,248 | |||||||||||||
Iowa: | ||||||||||||||||||
Urbandale (Des Moines) | Industrial | 310,000 | 1,946,613 | 1,144,794 | 1,111,819 | |||||||||||||
Kansas: | ||||||||||||||||||
Edwardsville (Kansas City) (Carlisle Tire) | Industrial | 1,185,000 | 6,047,986 | 2,358,818 | 4,874,168 | |||||||||||||
Edwardsville (Kansas City) (International Paper) | Industrial | 2,750,000 | 15,544,108 | 1,587,164 | 16,706,944 | |||||||||||||
Olathe (Kansas City) | Industrial | 2,350,000 | 29,387,000 | 879,098 | 30,857,902 | |||||||||||||
Topeka | Industrial | -0- | 3,679,843 | 802,124 | 2,877,719 | |||||||||||||
Kentucky: | ||||||||||||||||||
Buckner (Louisville) | Industrial | 2,280,000 | 24,527,852 | 2,472,411 | 24,335,441 | |||||||||||||
Frankfort (Lexington) | Industrial | 1,850,000 | 26,150,000 | 1,899,786 | 26,100,214 | |||||||||||||
Louisville | Industrial | 1,590,000 | 9,714,000 | 332,103 | 10,971,897 | |||||||||||||
Louisiana: | ||||||||||||||||||
Covington (New Orleans) | Industrial | 2,720,000 | 15,690,000 | 737,564 | 17,672,436 |
Property | Buildings & | Accumulated | Net Book | |||||||||||||||
SEPTEMBER 30, 2021 (cont’d) | Type | Land | Improvements | Depreciation | Value | |||||||||||||
Vermont: | ||||||||||||||||||
Burlington | Industrial | $ | 7,729 | $ | 46,096 | $ | 197 | $ | 53,628 | |||||||||
Virginia: | ||||||||||||||||||
Charlottesville | Industrial | 1,170 | 3,292 | 1,905 | 2,557 | |||||||||||||
Mechanicsville (Richmond) | Industrial | 1,160 | 6,676 | 3,560 | 4,276 | |||||||||||||
Richmond | Industrial | 446 | 4,651 | 1,937 | 3,160 | |||||||||||||
Roanoke (CHEP USA) | Industrial | 1,853 | 5,619 | 2,286 | 5,186 | |||||||||||||
Roanoke (FDX Ground) | Industrial | 1,740 | 8,460 | 1,799 | 8,401 | |||||||||||||
Washington: | ||||||||||||||||||
Burlington (Seattle/Everett) | Industrial | 8,000 | 22,371 | 3,154 | 27,217 | |||||||||||||
Wisconsin: | ||||||||||||||||||
Cudahy (Milwaukee) | Industrial | 980 | 8,835 | 4,075 | 5,740 | |||||||||||||
Green Bay | Industrial | 590 | 5,990 | 1,227 | 5,353 | |||||||||||||
Total as of September 30, 2021 | $ | 277,846 | $ | 2,025,844 | $ | 345,988 | $ | 1,957,702 |
Property | Buildings & | Accumulated | Net Book | |||||||||||||||
SEPTEMBER 30, 2020 | Type | Land | Improvements | Depreciation | Value | |||||||||||||
Alabama: | ||||||||||||||||||
Huntsville | Industrial | $ | 748 | $ | 5,914 | $ | 1,562 | $ | 5,100 | |||||||||
Mobile | Industrial | 2,480 | 30,572 | 1,763 | 31,289 | |||||||||||||
Arizona: | ||||||||||||||||||
Tolleson (Phoenix) | Industrial | 1,316 | 15,508 | 7,167 | 9,657 | |||||||||||||
Colorado: | ||||||||||||||||||
Colorado Springs | Industrial | 2,150 | 27,170 | 3,027 | 26,293 | |||||||||||||
Denver | Industrial | 1,150 | 5,224 | 1,973 | 4,401 | |||||||||||||
Connecticut: | ||||||||||||||||||
Newington (Hartford) | Industrial | 410 | 3,097 | 1,553 | 1,954 | |||||||||||||
Florida: | ||||||||||||||||||
Cocoa | Industrial | 1,881 | 12,246 | 3,403 | 10,724 | |||||||||||||
Davenport (Orlando) | Industrial | 7,060 | 31,025 | 3,286 | 34,799 | |||||||||||||
Daytona Beach | Industrial | 3,120 | 27,161 | 1,730 | 28,551 | |||||||||||||
Ft. Myers | Industrial | 2,486 | 19,198 | 1,821 | 19,863 | |||||||||||||
Homestead (Miami) | Industrial | 4,427 | 33,485 | 2,795 | 35,117 | |||||||||||||
Jacksonville (FDX) | Industrial | 1,165 | 5,419 | 2,979 | 3,605 | |||||||||||||
Jacksonville (FDX Ground) | Industrial | 6,000 | 24,926 | 3,633 | 27,293 | |||||||||||||
Lakeland | Industrial | 261 | 1,782 | 676 | 1,367 | |||||||||||||
Orlando | Industrial | 2,200 | 6,610 | 2,212 | 6,598 | |||||||||||||
Punta Gorda | Industrial | 0 | 4,134 | 1,286 | 2,848 | |||||||||||||
Tampa (FDX Ground) | Industrial | 5,000 | 14,745 | 5,680 | 14,065 | |||||||||||||
Tampa (FDX) | Industrial | 2,830 | 5,071 | 1,824 | 6,077 | |||||||||||||
Tampa (Tampa Bay Grand Prix) | Industrial | 1,867 | 3,811 | 1,347 | 4,331 | |||||||||||||
Georgia: | ||||||||||||||||||
Augusta (FDX Ground) | Industrial | 614 | 4,749 | 1,756 | 3,607 | |||||||||||||
Augusta (FDX) | Industrial | 380 | 1,604 | 558 | 1,426 | |||||||||||||
Braselton (Atlanta) | Industrial | 13,965 | 46,262 | 2,471 | 57,756 | |||||||||||||
Griffin (Atlanta) | Industrial | 760 | 14,322 | 5,338 | 9,744 | |||||||||||||
Savannah (Shaw) | Industrial | 4,405 | 51,621 | 3,530 | 52,496 | |||||||||||||
Savannah (FDX Ground) | Industrial | 3,441 | 24,091 | 1,133 | 26,399 | |||||||||||||
Illinois: | ||||||||||||||||||
Burr Ridge (Chicago) | Industrial | 270 | 1,437 | 822 | 885 | |||||||||||||
Elgin (Chicago) | Industrial | 1,280 | 5,902 | 2,791 | 4,391 | |||||||||||||
Granite City (St. Louis, MO) | Industrial | 340 | 12,358 | 5,895 | 6,803 | |||||||||||||
Montgomery (Chicago) | Industrial | 2,000 | 9,303 | 3,245 | 8,058 | |||||||||||||
Rockford (Collins Aerospace Systems) | Industrial | 480 | 4,620 | 711 | 4,389 | |||||||||||||
Rockford (Sherwin-Williams Co.) | Industrial | 1,100 | 4,451 | 1,091 | 4,460 | |||||||||||||
Sauget (St. Louis, MO) | Industrial | 1,890 | 13,315 | 2,050 | 13,155 | |||||||||||||
Schaumburg (Chicago) | Industrial | 1,040 | 4,407 | 2,534 | 2,913 |
81 |
Property | Buildings & | Accumulated | Net Book | |||||||||||||||
SEPTEMBER 30, 2017 (cont’d) | Type | Land | Improvements | Depreciation | Value | |||||||||||||
Maryland: | ||||||||||||||||||
Beltsville (Washington, DC) | Industrial | $ | 3,200,000 | $ | 11,312,355 | $ | 3,843,707 | $ | 10,668,648 | |||||||||
Michigan: | ||||||||||||||||||
Walker (Grand Rapids) | Industrial | 4,034,363 | 27,620,623 | 354,111 | 31,300,875 | |||||||||||||
Livonia (Detroit) | Industrial | 320,000 | 13,442,030 | 1,698,607 | 12,063,423 | |||||||||||||
Orion | Industrial | 4,649,971 | 18,235,665 | 4,019,239 | 18,866,397 | |||||||||||||
Romulus (Detroit) | Industrial | 531,000 | 4,136,506 | 1,922,903 | 2,744,603 | |||||||||||||
Minnesota: | ||||||||||||||||||
Stewartville (Rochester) | Industrial | 900,000 | 4,320,000 | 443,077 | 4,776,923 | |||||||||||||
Mississippi: | ||||||||||||||||||
Olive Branch (Memphis, TN)(Anda Pharmaceuticals, Inc.) | Industrial | 800,000 | 13,750,000 | 1,850,962 | 12,699,038 | |||||||||||||
Olive Branch (Memphis, TN)(Milwaukee Tool) | Industrial | 2,550,000 | 34,364,917 | 3,159,783 | 33,755,134 | |||||||||||||
Richland (Jackson) | Industrial | 211,000 | 1,689,691 | 904,133 | 996,558 | |||||||||||||
Ridgeland (Jackson) | Industrial | 218,000 | 1,640,591 | 1,246,001 | 612,590 | |||||||||||||
Missouri: | ||||||||||||||||||
Kansas City (Bunzl) | Industrial | 1,000,000 | 8,651,226 | 646,520 | 9,004,706 | |||||||||||||
Kansas City (Kellogg) (1) | Industrial | 660,000 | 4,140,474 | 1,147,694 | 3,652,780 | |||||||||||||
Liberty (Kansas City) | Industrial | 723,000 | 6,674,881 | 3,325,236 | 4,072,645 | |||||||||||||
O’Fallon (St. Louis) | Industrial | 264,000 | 3,981,913 | 2,228,921 | 2,016,992 | |||||||||||||
St. Joseph | Industrial | 800,000 | 12,489,270 | 5,101,907 | 8,187,363 | |||||||||||||
Nebraska: | ||||||||||||||||||
Omaha | Industrial | 1,170,000 | 4,774,691 | 2,233,901 | 3,710,790 | |||||||||||||
New Jersey: | ||||||||||||||||||
Carlstadt (New York, NY) | Industrial | 1,194,000 | 3,709,589 | 939,584 | 3,964,005 | |||||||||||||
Somerset | Shopping Center | 34,317 | 3,038,573 | 1,494,297 | 1,578,593 | |||||||||||||
New York: | ||||||||||||||||||
Cheektowaga (Buffalo) | Industrial | 4,796,765 | 6,164,058 | 1,692,362 | 9,268,461 | |||||||||||||
Halfmoon (Albany) | Industrial | 1,190,000 | 4,335,600 | 611,431 | 4,914,169 | |||||||||||||
Hamburg (Buffalo) | Industrial | 1,700,000 | 33,150,000 | 850,000 | 34,000,000 | |||||||||||||
Orangeburg (New York) (1) | Industrial | 694,720 | 3,200,955 | 2,436,637 | 1,459,038 | |||||||||||||
North Carolina: | ||||||||||||||||||
Concord (Charlotte) | Industrial | 4,305,000 | 28,739,797 | 1,471,238 | 31,573,559 | |||||||||||||
Concord (Charlotte) | Industrial | 4,306,684 | 35,736,461 | 152,720 | 39,890,425 | |||||||||||||
Fayetteville | Industrial | 172,000 | 5,279,629 | 2,698,223 | 2,753,406 | |||||||||||||
Winston-Salem | Industrial | 980,000 | 6,258,613 | 2,401,589 | 4,837,024 | |||||||||||||
Ohio: | ||||||||||||||||||
Bedford Heights (Cleveland) | Industrial | 990,000 | 5,929,836 | 1,707,394 | 5,212,442 | |||||||||||||
Cincinnati | Industrial | 800,000 | 5,950,000 | 317,842 | 6,432,158 | |||||||||||||
Kenton | Industrial | 854,780 | 17,026,827 | 18,188 | 17,863,419 | |||||||||||||
Lebanon (Cincinnati) | Industrial | 240,000 | 4,212,425 | 594,620 | 3,857,805 | |||||||||||||
Monroe (Cincinnati) | Industrial | 1,800,000 | 11,137,000 | 737,707 | 12,199,293 | |||||||||||||
Richfield (Cleveland) | Industrial | 2,676,848 | 13,758,630 | 2,728,544 | 13,706,934 | |||||||||||||
Stow | Industrial | 1,429,715 | 17,504,350 | -0- | 18,934,065 | |||||||||||||
Streetsboro (Cleveland) | Industrial | 1,760,000 | 17,840,000 | 2,515,897 | 17,084,103 | |||||||||||||
West Chester Twp. (Cincinnati) | Industrial | 695,000 | 5,038,686 | 2,125,801 | 3,607,885 | |||||||||||||
Oklahoma: | ||||||||||||||||||
Oklahoma City (FDX Ground) | Industrial | 1,410,000 | 11,174,462 | 1,306,735 | 11,277,727 | |||||||||||||
Oklahoma City (Bunzl) | Industrial | 844,688 | 7,883,751 | 50,537 | 8,677,902 | |||||||||||||
Tulsa | Industrial | 790,000 | 2,958,031 | 309,194 | 3,438,837 | |||||||||||||
Pennsylvania: | ||||||||||||||||||
Altoona | Industrial | 1,200,000 | 7,808,650 | 784,660 | 8,223,990 | |||||||||||||
Imperial (Pittsburgh) | Industrial | 3,700,000 | 16,250,000 | 659,722 | 19,290,278 | |||||||||||||
Monaca (Pittsburgh) | Industrial | 401,716 | 7,484,125 | 2,642,181 | 5,243,660 |
| Property | Buildings & | Accumulated | Net Book | ||||||||||||||
SEPTEMBER 30, 2020 (cont’d) | Type | Land | Improvements | Depreciation | Value | |||||||||||||
Wheeling (Chicago) | Industrial | $ | 5,112 | $ | 13,881 | $ | 5,210 | $ | 13,783 | |||||||||
Indiana: | ||||||||||||||||||
Greenwood (Indianapolis) (ULTA) | Industrial | 2,250 | 35,515 | 4,906 | 32,859 | |||||||||||||
Greenwood (Indianapolis) (Amazon) | Industrial | 4,839 | 74,525 | 1,911 | 77,453 | |||||||||||||
Indianapolis (FDX Ground) | Industrial | 3,746 | 21,758 | 3,420 | 22,084 | |||||||||||||
Lafayette | Industrial | 2,802 | 22,277 | 667 | 24,412 | |||||||||||||
Iowa: | ||||||||||||||||||
Urbandale (Des Moines) | Industrial | 310 | 2,234 | 1,377 | 1,167 | |||||||||||||
Kansas: | ||||||||||||||||||
Edwardsville (Kansas City) (Carlstar Group) | Industrial | 1,185 | 6,098 | 2,847 | 4,436 | |||||||||||||
Edwardsville (Kansas City) (International Paper) | Industrial | 2,750 | 15,544 | 2,831 | 15,463 | |||||||||||||
Olathe (Kansas City) | Industrial | 2,350 | 29,476 | 3,140 | 28,686 | |||||||||||||
Topeka | Industrial | 0 | 3,680 | 1,085 | 2,595 | |||||||||||||
Kentucky: | ||||||||||||||||||
Buckner (Louisville) | Industrial | 2,280 | 24,528 | 4,397 | 22,411 | |||||||||||||
Frankfort (Lexington) | Industrial | 1,850 | 26,150 | 3,911 | 24,089 | |||||||||||||
Louisvlle | Industrial | 1,590 | 9,714 | 1,079 | 10,225 | |||||||||||||
Louisiana: | ||||||||||||||||||
Covington (New Orleans) | Industrial | 2,720 | 15,706 | 1,947 | 16,479 | |||||||||||||
Maryland: | ||||||||||||||||||
Beltsville (Washington, DC) | Industrial | 3,200 | 11,312 | 4,748 | 9,764 | |||||||||||||
Michigan: | ||||||||||||||||||
Walker (Grand Rapids) | Industrial | 4,034 | 27,621 | 2,479 | 29,176 | |||||||||||||
Livonia (Detroit) | Industrial | 320 | 13,560 | 2,767 | 11,113 | |||||||||||||
Orion | Industrial | 4,650 | 18,291 | 5,430 | 17,511 | |||||||||||||
Romulus (Detroit) | Industrial | 531 | 4,418 | 2,329 | 2,620 | |||||||||||||
Minnesota: | ||||||||||||||||||
Stewartville (Rochester) | Industrial | 900 | 4,324 | 777 | 4,447 | |||||||||||||
Mississippi: | ||||||||||||||||||
Olive Branch (Memphis, TN) (Anda Pharmaceuticals, Inc.) | Industrial | 800 | 13,750 | 2,909 | 11,641 | |||||||||||||
Olive Branch (Memphis, TN) (Milwaukee Tool) | Industrial | 2,550 | 34,365 | 5,813 | 31,102 | |||||||||||||
Richland (Jackson) | Industrial | 211 | 1,690 | 1,129 | 772 | |||||||||||||
Ridgeland (Jackson) | Industrial | 218 | 2,519 | 1,465 | 1,272 | |||||||||||||
Missouri: | ||||||||||||||||||
Kansas City | Industrial | 1,000 | 9,003 | 1,408 | 8,595 | |||||||||||||
Liberty (Kansas City) | Industrial | 724 | 7,075 | 3,904 | 3,895 | |||||||||||||
O’Fallon (St. Louis) | Industrial | 264 | 3,986 | 2,614 | 1,636 | |||||||||||||
St. Joseph | Industrial | 800 | 12,598 | 6,158 | 7,240 | |||||||||||||
Nebraska: | ||||||||||||||||||
Omaha | Industrial | 1,170 | 4,794 | 2,609 | 3,355 | |||||||||||||
New Jersey: | ||||||||||||||||||
Carlstadt (New York, NY) | Industrial | 1,194 | 4,103 | 1,229 | 4,068 | |||||||||||||
Somerset | Shopping Center | 34 | 3,105 | 1,779 | 1,360 | |||||||||||||
Trenton | Industrial | 8,336 | 75,652 | 3,880 | 80,108 | |||||||||||||
New York: | ||||||||||||||||||
Cheektowaga (Buffalo) | Industrial | 4,797 | 6,164 | 2,170 | 8,791 | |||||||||||||
Halfmoon (Albany) | Industrial | 1,190 | 4,537 | 945 | 4,782 | |||||||||||||
Hamburg (Buffalo) | Industrial | 1,700 | 33,432 | 3,436 | 31,696 | |||||||||||||
North Carolina: | ||||||||||||||||||
Concord I (Charlotte) | Industrial | 4,305 | 28,749 | 4,002 | 29,052 | |||||||||||||
Concord II (Charlotte) | Industrial | 4,307 | 35,736 | 2,902 | 37,141 | |||||||||||||
Fayetteville | Industrial | 172 | 5,283 | 3,397 | 2,058 | |||||||||||||
Whitsett (Greensboro) | Industrial | 2,735 | 43,976 | 376 | 46,335 | |||||||||||||
Winston-Salem | Industrial | 980 | 6,284 | 3,057 | 4,207 |
82 |
Property | Buildings & | Accumulated | Net Book | Property | Buildings & | Accumulated | Net Book | |||||||||||||||||||||||||||||
SEPTEMBER 30, 2017 (cont’d) | Type | Land | Improvements | Depreciation | Value | |||||||||||||||||||||||||||||||
SEPTEMBER 30, 2020 (cont’d) | Type | Land | Improvements | Depreciation | Value | |||||||||||||||||||||||||||||||
Ohio: | ||||||||||||||||||||||||||||||||||||
Bedford Heights (Cleveland) | Industrial | $ | 990 | $ | 6,314 | $ | 2,310 | $ | 4,994 | |||||||||||||||||||||||||||
Cincinnati | Industrial | 800 | 5,950 | 776 | 5,974 | |||||||||||||||||||||||||||||||
Lancaster (Columbus) | Industrial | 959 | 16,599 | 213 | 17,345 | |||||||||||||||||||||||||||||||
Kenton | Industrial | 855 | 17,876 | 1,449 | 17,282 | |||||||||||||||||||||||||||||||
Lebanon (Cincinnati) | Industrial | 240 | 4,315 | 933 | 3,622 | |||||||||||||||||||||||||||||||
Monroe (Cincinnati) | Industrial | 1,800 | 19,777 | 1,945 | 19,632 | |||||||||||||||||||||||||||||||
Richfield (Cleveland) | Industrial | 2,677 | 13,770 | 3,800 | 12,647 | |||||||||||||||||||||||||||||||
Stow | Industrial | 1,430 | 17,504 | 1,346 | 17,588 | |||||||||||||||||||||||||||||||
Streetsboro (Cleveland) | Industrial | 1,760 | 17,840 | 3,888 | 15,712 | |||||||||||||||||||||||||||||||
West Chester Twp. (Cincinnati) | Industrial | 695 | 5,039 | 2,663 | 3,071 | |||||||||||||||||||||||||||||||
Oklahoma: | ||||||||||||||||||||||||||||||||||||
Oklahoma City (FDX Ground) | Industrial | 1,410 | 11,215 | 2,185 | 10,440 | |||||||||||||||||||||||||||||||
Oklahoma City (Bunzl) | Industrial | 845 | 7,883 | 657 | 8,071 | |||||||||||||||||||||||||||||||
Oklahoma City (Amazon) | Industrial | 1,618 | 28,260 | 2,052 | 27,826 | |||||||||||||||||||||||||||||||
Oklahoma City (Amazon II) | Industrial | 1,378 | 13,584 | 14 | 14,948 | |||||||||||||||||||||||||||||||
Tulsa | Industrial | 790 | 2,958 | 553 | 3,195 | |||||||||||||||||||||||||||||||
Pennsylvania: | ||||||||||||||||||||||||||||||||||||
Altoona | Industrial | 1,200 | 7,823 | 1,392 | 7,631 | |||||||||||||||||||||||||||||||
Imperial (Pittsburgh) | Industrial | 3,700 | 16,264 | 1,912 | 18,052 | |||||||||||||||||||||||||||||||
Monaca (Pittsburgh) | Industrial | 402 | 7,551 | 3,481 | 4,472 | |||||||||||||||||||||||||||||||
South Carolina: | ||||||||||||||||||||||||||||||||||||
Aiken (Augusta, GA) | Industrial | $ | 1,362,458 | $ | 19,677,937 | $ | 126,141 | $ | 20,914,254 | Industrial | 1,362 | 19,678 | 1,639 | 19,401 | ||||||||||||||||||||||
Charleston (FDX) | Industrial | 4,639 | 16,880 | 1,265 | 20,254 | |||||||||||||||||||||||||||||||
Charleston (FDX Ground) | Industrial | 7,103 | 39,473 | 2,193 | 44,383 | |||||||||||||||||||||||||||||||
Ft. Mill (Charlotte, NC) | Industrial | 1,670,000 | 13,743,307 | 2,302,265 | 13,111,042 | Industrial | 1,747 | 15,317 | 3,434 | 13,630 | ||||||||||||||||||||||||||
Hanahan (Charleston)(SAIC) | Industrial | 1,129,000 | 12,245,441 | 3,961,769 | 9,412,672 | |||||||||||||||||||||||||||||||
Hanahan (Charleston)(FDX Ground) | Industrial | 930,000 | 6,684,653 | 1,897,664 | 5,716,989 | |||||||||||||||||||||||||||||||
Hanahan (Charleston) (SAIC) | Industrial | 1,129 | 13,334 | 5,256 | 9,207 | |||||||||||||||||||||||||||||||
Hanahan (Charleston) (Amazon) | Industrial | 930 | 8,373 | 2,513 | 6,790 | |||||||||||||||||||||||||||||||
Tennessee: | ||||||||||||||||||||||||||||||||||||
Chattanooga | Industrial | 300,000 | 4,716,518 | 1,262,219 | 3,754,299 | Industrial | 300 | 5,069 | 1,678 | 3,691 | ||||||||||||||||||||||||||
Lebanon (Nashville) | Industrial | 2,230,000 | 11,985,126 | 1,843,853 | 12,371,273 | Industrial | 2,230 | 11,985 | 2,766 | 11,449 | ||||||||||||||||||||||||||
Memphis | Industrial | 1,240,887 | 13,381,050 | 2,573,085 | 12,048,852 | Industrial | 1,235 | 14,858 | 3,787 | 12,306 | ||||||||||||||||||||||||||
Shelby County | Vacant Land | 11,065 | -0- | -0- | 11,065 | Vacant Land | 11 | 0 | 0 | 11 | ||||||||||||||||||||||||||
Texas: | ||||||||||||||||||||||||||||||||||||
Carrollton (Dallas) | Industrial | 1,500,000 | 16,319,203 | 3,130,523 | 14,688,680 | Industrial | 1,500 | 16,995 | 4,442 | 14,053 | ||||||||||||||||||||||||||
Corpus Christi | Industrial | -0- | 4,771,913 | 672,040 | 4,099,873 | Industrial | 0 | 4,808 | 1,049 | 3,759 | ||||||||||||||||||||||||||
Edinburg | Industrial | 1,000,000 | 11,039,014 | 1,188,983 | 10,850,031 | Industrial | 1,000 | 11,039 | 2,040 | 9,999 | ||||||||||||||||||||||||||
El Paso | Industrial | 3,225,195 | 9,205,997 | 1,709,714 | 10,721,478 | Industrial | 3,225 | 9,206 | 2,512 | 9,919 | ||||||||||||||||||||||||||
Ft. Worth (Dallas) | Industrial | 8,200,000 | 27,100,832 | 1,505,602 | 33,795,230 | Industrial | 8,200 | 27,419 | 3,627 | 31,992 | ||||||||||||||||||||||||||
Houston | Industrial | 1,661,120 | 6,487,338 | 1,248,713 | 6,899,745 | Industrial | 1,661 | 6,530 | 1,825 | 6,366 | ||||||||||||||||||||||||||
Lindale (Tyler) | Industrial | 540,000 | 9,396,500 | 722,416 | 9,214,084 | Industrial | 540 | 9,426 | 1,456 | 8,510 | ||||||||||||||||||||||||||
Mesquite (Dallas) | Industrial | 6,247,658 | 43,632,835 | 279,698 | 49,600,795 | Industrial | 6,248 | 43,632 | 3,636 | 46,244 | ||||||||||||||||||||||||||
Spring (Houston) | Industrial | 1,890,000 | 17,393,798 | 1,629,658 | 17,654,140 | Industrial | 1,890 | 17,439 | 2,979 | 16,350 | ||||||||||||||||||||||||||
Waco | Industrial | 1,350,000 | 11,201,368 | 1,210,344 | 11,341,024 | Industrial | 1,350 | 11,201 | 2,075 | 10,476 | ||||||||||||||||||||||||||
Utah: | ||||||||||||||||||||||||||||||||||||
Ogden (Salt Lake City) | Industrial | 1,287 | 11,380 | 97 | 12,570 | |||||||||||||||||||||||||||||||
Virginia: | ||||||||||||||||||||||||||||||||||||
Charlottesville | Industrial | 1,170,000 | 3,186,988 | 1,489,266 | 2,867,722 | Industrial | 1,170 | 3,292 | 1,801 | 2,661 | ||||||||||||||||||||||||||
Mechanicsville (Richmond) | Industrial | 1,160,000 | 6,625,011 | 2,824,533 | 4,960,478 | Industrial | 1,160 | 6,667 | 3,375 | 4,452 | ||||||||||||||||||||||||||
Richmond | Industrial | 446,000 | 4,322,309 | 1,409,820 | 3,358,489 | Industrial | 446 | 4,644 | 1,794 | 3,296 | ||||||||||||||||||||||||||
Roanoke (CHEP USA) | Industrial | 1,853,000 | 5,552,447 | 1,516,288 | 5,889,159 | Industrial | 1,853 | 5,610 | 2,092 | 5,371 | ||||||||||||||||||||||||||
Roanoke (FDX Ground) | Industrial | 1,740,000 | 8,460,000 | 930,962 | 9,269,038 | Industrial | 1,740 | 8,460 | 1,582 | 8,618 | ||||||||||||||||||||||||||
Washington: | ||||||||||||||||||||||||||||||||||||
Burlington (Seattle/Everett) | Industrial | 8,000,000 | 22,228,547 | 855,500 | 29,373,047 | Industrial | 8,000 | 22,371 | 2,572 | 27,799 | ||||||||||||||||||||||||||
Wisconsin: | ||||||||||||||||||||||||||||||||||||
Cudahy (Milwaukee) | Industrial | 980,000 | 8,402,361 | 3,075,370 | 6,306,991 | Industrial | 980 | 8,827 | 3,812 | 5,995 | ||||||||||||||||||||||||||
Green Bay | Industrial | 590,000 | 5,980,000 | 613,333 | 5,956,667 | Industrial | 590 | 5,979 | 1,072 | 5,497 | ||||||||||||||||||||||||||
Total as of September 30, 2017 | $ | 191,759,539 | $ | 1,261,075,064 | $ | 177,372,519 | $ | 1,275,462,084 | ||||||||||||||||||||||||||||
Total as of September 30, 2020 | $ | 250,497 | $ | 1,793,367 | $ | 296,020 | $ | 1,747,844 |
83 |
NOTE 3 – ACQUISITIONS, EXPANSIONS AND DISPOSITIONS
Fiscal 20182021 Acquisitions accounted for as asset acquisitions
On November 2, 2017,December 17, 2020, we purchased a newly constructed 121,683500,000 square foot industrial building, situated on 16.2100.0 acres, located in Charleston, SC. The building is 100% net-leased to FedEx Corporation (FDX), for 15 years through August 2032. The purchase price was $21,872,170. We obtained a 15 year fully-amortizing mortgage loan of $14,200,000 at a fixed interest rate of 4.23%. Annual rental revenue over the remaining term of the lease averages approximately $1,315,000.
On November 30, 2017, we purchased a newly constructed 300,000 square foot industrial building, situated on 123.0 acres, located in Oklahoma City, OK. The building is 100% net-leased to Amazon.com Services, Inc. for 10 years through October 2027. The lease is guaranteed by Amazon.com, Inc. The purchase price was $30,250,000. We obtained a 10 year mortgage loan, amortizing over 18 years, of $19,600,000 at a fixed interest rate of 3.64%. Annual rental revenue over the remaining term of the lease averages approximately $1,884,000.
On January 22, 2018, we purchased a newly constructed 831,764 square foot industrial building, situated on 62.4 acres, located in Savannah, GA. The building is 100% net-leased to Shaw Industries, Inc. for 10 years through September 2027. The purchase price was $57,483,636. We obtained a 14 year fully-amortizing mortgage loan of $33,300,000 at a fixed interest rate of 3.53%. Annual rental revenue over the remaining term of the lease averages approximately $3,551,000.
On April 6, 2018, we purchased a newly constructed 399,440 square foot industrial building, situated on 27.5 acres, located in Daytona Beach, FL. The building is 100% net-leased to B. Braun Medical Inc. for 10 years through April 2028. The purchase price was $30,750,540. We obtained a 15 year fully-amortizing mortgage loan of $19,500,000 at a fixed interest rate of 4.25%. Annual rental revenue over the remaining term of the lease averages approximately $2,130,000.
On June 28, 2018, we purchased a newly constructed 362,942 square foot industrial building, situated on 31.3 acres, located in Mobile, AL. The building is 100% net-leased to Amazon.com Services, Inc. for 11 years through November 2028. The lease is guaranteed by Amazon.com, Inc. The purchase price was $33,688,276. We obtained a 14 year fully-amortizing mortgage loan of $19,000,000 at a fixed interest rate of 4.14%. Annual rental revenue over the remaining term of the lease averages approximately $2,020,000.
On August 15, 2018, we purchased a newly constructed 265,318 square foot industrial building, situated on 48.9 acres, located in Charleston, SC.Columbus, OH MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through June 2033.September 2035. The purchase price was $47,174,296.$73.3 million. We obtained a 15 year, fully-amortizing mortgage loan of $29,860,000$47.0 million at a fixed interest rate of 3.82%2.95%. Annual rental revenue over the remaining term of the lease averages approximately $2,713,000.$4.6 million.
On September 6, 2018,December 24, 2020, we purchased a newly constructed 373,750658,000 square foot industrial building, situated on 92.6130.2 acres, located in Braselton,the Atlanta, GA whichMSA. The building is100% net-leased to Home Depot U.S.A., Inc. for 20 years through November 2040. The purchase price was $95.9 million. We obtained a 17 year, fully-amortizing mortgage loan of $57.0 million at a fixed interest rate of 3.25%. Annual rental revenue over the remaining term of the lease averages $5.5 million.
On July 29, 2021, we purchased a newly constructed 144,000 square foot industrial building, situated on 43.4 acres, located in the Atlanta Metropolitan Statistical Area (MSA).Burlington, VT MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through February 2033.May 2036. The property was acquired for a purchase price was $61,113,264. We obtained a 15 year fully-amortizing mortgage loan of $39,700,000 at a fixed interest rate of 4.02%.$54.8 million. Annual rental revenue over the remaining term of the lease averages approximately $3,801,000.$3.2 million. Subsequent to the closing of the purchase, we obtained a mortgage loan commitment for a 15 year, fully-amortizing mortgage loan of $35.5 million at a fixed interest rate of 2.50%.
On August 25, 2021, we purchased a newly constructed 259,000 square foot industrial building, situated on 42.6 acres, located in the Knoxville, TN MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through May 2036. The property was acquired for a purchase price of $34.4 million. Annual rental revenue over the remaining term of the lease averages $2.0 million. Subsequent to the closing of the purchase, we obtained a mortgage loan commitment for a 15 year, fully-amortizing mortgage loan of $22.3 million at a fixed interest rate of 2.50%.
Subsequent to fiscal yearend, on October 27, 2021, we purchased a newly constructed 291,000 square foot industrial building, situated on 46.0 acres, located in the Birmingham, AL MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through July 2036. The property was acquired for a purchase price of $30.2 million. Annual rental revenue over the remaining term of the lease averages $1.7 million. We obtained a mortgage loan commitment for a 15 year, fully-amortizing mortgage loan of $19.3 million at a fixed interest rate of 2.40%, which has not yet closed.
We evaluated the property acquisitions which took place during the twelve months ended September 30, 2018,2021, to determine whether an integrated set of assets and activities meets the definition of a business, pursuant to ASU 2017-01. Acquisitions that do not meet the definition of a business are accounted for as asset acquisitions. Accordingly, we accounted for all sevenfour properties purchased during fiscal 20182021 as asset acquisitions and allocated the total cash consideration, including transaction costs of approximately $1,071,000,$720,000, to the individual assets acquired on a relative fair value basis. There were no liabilities assumed in these acquisitions. The financial information set forth below summarizes our purchase price allocation for these sevenfour properties acquired during the fiscal year 20182021 that were accounted for as asset acquisitions:acquisitions (in thousands):
SCHEDULE OF PROPERTIES ACQUIRED DURING PERIOD ACCOUNTED FOR ASSET ACQUISITIONS
Land | $ | 37,330,383 | $ | 26,868 | ||||
Building | 239,890,739 | 225,824 | ||||||
In-Place Leases | 6,181,731 | 6,466 | ||||||
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The following table summarizes the operating results included in our consolidated statements of income for the fiscal year ended September 30, 20182021 for the sevenfour properties acquired during the twelve months ended September 30, 2018:2021 (in thousands):
SUMMARY OF OPERATIONS RESULT FOR 2021 PROPERTIES ACQUISITIONS
Year Ended 9/30/2018 | ||||||||
Year Ended 9/30/2021 | ||||||||
Rental Revenues | $ | 7,429,989 | $ | 8,590 | ||||
Net Income Attributable to Common Shareholders | 2,131,150 | |||||||
Net Income (Loss) Attributable to Common Shareholders | 3,089 |
FedEx Ground Package System, Inc.’s ultimate parent, FDX, Amazon.com, Inc.FedEx Corporation, and Shaw Industries, Inc.’sHome Depot U.S.A., Inc’s ultimate parent, Berkshire Hathaway,Home Depot, Inc., are publicly-ownedpublicly-listed companies and financial information related to these entities isare available at the SEC’s website,www.sec.gov.www.sec.gov. The references in this report to the SEC’s website are not intended to and do not include, or incorporate by reference into this report, the information on thewww.sec.gov website.
Fiscal 20182021 Expansions
OnDuring fiscal 2021, we completed the first phase of a two-phase parking expansion project for FedEx Ground Package System, Inc. at our property located in Olathe (Kansas City), KS. The first phase of this parking expansion project was completed for a total cost of $3.4 million, resulting in an initial increase in annual rent effective November 5, 2020 of approximately $340,000 from approximately $2.1 million, or $6.83 per square foot, to approximately $2.5 million, or $7.91 per square foot. Furthermore, annual rent increased by 2.1% on June 1, 2017,2021 and will continue to increase 2.1% every five years, resulting in an annualized rent from November 5, 2021 through the remaining term of the lease of approximately $2.6 million, or $8.15 per square foot. We recently began construction on the second phase of this parking expansion project at this location, which upon completion will further increase the rental rate and extend the lease term.
In addition, effective June 4, 2021, we completed a parking lot expansion for aUPS at our property leased to FedEx Ground Package System, Inc., located in Indianapolis, IN was completedHalfmoon (Albany), NY for a total project cost of approximately $1,683,000,$835,000, resulting in a new 10 year lease which extended the prior lease expiration date from April 2024 to October 2027. In addition, the expansion resulted in an initial increase in annual rent effective fromon the date of completion of approximately $184,000$52,000 from approximately $1,533,000,$510,000, or $4.67$6.80 per square foot, to approximately $1,715,000,$562,000, or $5.23$7.50 per square foot. Furthermore, annual rent will continue to increase each year by 2.0% resulting in an annualized rent from June 4, 2021 through the remaining term of the lease of approximately $622,000, or $8.29 per square foot.
On September 27, 2018, aWe have several FedEx Ground parking expansion projects in progress with more under discussion. Currently there are nine parking expansion projects underway, which we expect to cost approximately $42.6 million. These parking expansion projects will enable us to capture additional rent while lengthening the terms of these leases. We are also in discussions to expand the parking at eight additional locations bringing the total recently completed and likely future parking lot expansion projects to 18 currently.
Due to the proliferation of ecommerce sales and last mile deliveries, it is important to take into account the large amounts of real estate utilized for a property leasedtrailer, van, and car parking at many of our properties in determining how our in-place rental rates compare to FedEx Ground Package System, Inc., located in Ft. Mill, SC was completedmarket rental rates for a total project cost of approximately $1,834,000, resultingproperties being used in a new 10 year lease which extended the prior lease expiration date from October 2023 to August 2028. In addition, the expansion resulted in an increase in annual rent effective from the date of completion of approximately $183,000 from approximately $1,415,000, or $8.00similar manner. Rents per square foot on properties that may be nearby, but have only limited acreage devoted to approximately $1,598,000, or $9.03 per square foot.parking, are poor comparisons as they cannot accommodate the same tenant needs.
Fiscal 2018 Dispositions2021 Disposition
Two leases were set to expire during fiscal 2018 with Kellogg Sales Company (Kellogg) for our 65,067 square foot facility located in Kansas City, MO through July 31, 2018 and our 50,400 square foot facility located in Orangeburg, NY through February 28, 2018. Kellogg informed us that they would not be renewing these leases. On December 18, 2017, April 15, 2021, we sold our property located in Kansas City, MO for $4,900,000, with net sale proceeds of approximately $4,602,000 and, on December 22, 2017, we sold our property located in Orangeburg, NY for $6,170,000, with net sale proceeds of approximately $5,898,000. In conjunction with the sale of these two properties, we simultaneously entered into a lease termination agreement for each property whereby we received a termination fee from Kellogg totaling approximately $210,000 which represents a weighted average of 80% of the then remaining rent due under each respective lease.
On June 1, 2018, we sold a 68,37060,400 square foot building located in Colorado Springs, COCarlstadt, NJ which is in the New York, NY MSA, for $5,800,000, with net salegross proceeds of approximately $5,465,000.$13.0 million. Prior to the sale, we owned a 51% interest in this property. Our 51% portion of this property, it was leased to FedEx Ground Package System, Inc. through September 2018. The tenant informed us that they would not be renewing this lease because they have moved their operations from our former 68,370 square foot facility to our newly constructed 225,362 square foot facility, which is also located in Colorado Springs, CO. On June 9, 2016, we purchased this newly constructed 225,362 square foot industrial building, which is leased to FedEx Ground Package System, Inc. for 10 years through January 2026.
On June 5, 2018, we sold an 87,500 square foot vacant building located in Ft. Myers, FL for $6,400,000, with netthe sale proceeds of approximately $6,119,000. Prior to this property becoming vacant, it was leased to FedEx Ground Package System, Inc. through June 2017. FedEx Ground Package System, Inc. vacated this property because they moved their operations to our newly constructed 213,672 square foot facility, which is also located in Ft. Myers, FL. We purchased this newly constructed facility on December 30, 2016 and it is leased to FedEx Ground Package System, Inc. for 10 years through August 2027.
These four properties sold during fiscal 2018, resulted in a U.S. GAAP net realized gain applicable to common shareholders of approximately $7,485,000,$3.3 million, representing a 51%159% gain over the depreciated U.S. GAAP basis and a net realized gain over our historic undepreciated cost basis of approximately $1,160,000,$2.6 million, representing a 6%96% net gain over our historic undepreciated cost basis.
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Fiscal 20172020 Acquisitions accounted for as business combinations
On October 17, 2016,10, 2019, we purchased a newly constructed 338,584616,000 square foot industrial building, situated on 78.6 acres, located in Hamburg, NY, whichthe Indianapolis, IN Metropolitan Statistical Area (MSA). The building is100% net-leased to a subsidiary of Amazon.com Services, Inc. (Amazon) for 15 years through August 2034. The lease is guaranteed by Amazon. The purchase price was $81.5 million. We obtained an 18 year, fully-amortizing mortgage loan of $52.5 million at a fixed interest rate of 4.27%. Annual rental revenue over the remaining term of the lease averages $5.0 million.
On March 30, 2020, we purchased a newly constructed 153,000 square foot industrial building, situated on 24.2 acres, located in the BuffaloColumbus, OH MSA. The building is 100% net-leased to Magna Seating of America, Inc. for 10 years through January 2030. The purchase price was $17.9 million. We obtained a 10 year, fully-amortizing mortgage loan of $9.4 million at a fixed interest rate of 3.47%. Annual rental revenue over the remaining term of the lease averages $1.2 million.
On May 21, 2020, we purchased a newly constructed 286,000 square foot industrial building, situated on 39.3 acres, located in the Greensboro, NC MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through March 2031.April 2035. The purchase price was $35,100,000.$47.6 million. We obtained a 15 year, fully-amortizing mortgage loan of $23,500,000$30.3 million at a fixed interest rate of 4.03%3.10%. Annual rental revenue over the remaining term of the lease averages approximately $2,309,000. In connection with the acquisition, we completed our evaluation of the acquired lease. As a result of our evaluation, we allocated $250,000 to an Intangible Asset associated with the lease in-place.$3.0 million.
On December 30, 2016,May 21, 2020, we purchased a newly constructed 213,67270,000 square foot industrial building, situated on 7.5 acres, located in Ft. Myers, FL.the Salt Lake City, UT MSA. The building is 100% net-leased to FedEx Ground Package System, Inc.Corporation for 1015 years through September 2026.March 2035. The purchase price was $21,001,538.$12.9 million. We obtained a 15 year, fully-amortizing mortgage loan of $14,500,000$8.4 million at a fixed interest rate of 3.97%3.18%. Annual rental revenue over the remaining term of the lease averages approximately $1,365,000. In connection with the acquisition, we completed our evaluation of the acquired lease. As a result of our evaluation, we allocated $201,538 to an Intangible Asset associated with the lease in-place. $772,000.
On September 1, 2017, a parking lot expansion for this property was completed for a cost of approximately $862,000, resulting in a new 10 year lease which extended the prior lease expiration date from September 2026 to August 2027. In addition, the expansion resulted in an increase in annual rent effective from the date of completion of approximately $53,000 from approximately $1,365,000 to approximately $1,418,000.
Fiscal 2017 Acquisitions accounted for as asset acquisitions
On April 5, 2017,15, 2020, we purchased a newly constructed 343,483121,000 square foot industrial building, situated on 21.5 acres, located in Walker, MI, which is in the Grand Rapids MSA.Oklahoma City, OK. The building is 100% net-leased to FedEx Ground Package System, Inc.a subsidiary of Amazon for 1510 years through January 2032.August 2030. The lease is guaranteed by Amazon. The purchase price was $32,120,000.$15.2 million. We obtained a 15 year, fully-amortizing mortgage loan of $20,875,000$9.8 million at a fixed interest rate of 3.86%3.00%. Annual rental revenue over the remaining term of the lease averages approximately $2,102,000.$934,000.
On June 23, 2017, we purchased a newly constructed 351,874 square foot industrial building located in Mesquite, TX, which is in the Dallas MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through March 2032. The purchase price was $50,621,072. We obtained a 15 year fully-amortizing mortgage loan of $32,900,000 at a fixed interest rate of 3.60%. Annual rental revenue over the remaining term of the lease averages approximately $3,194,000.
On June 27, 2017, we purchased a newly constructed 315,560 square foot industrial building located in Aiken, SC, which is in the Augusta, GA MSA. The building is 100% net-leased to Autoneum North America, Inc. for 15 years through April 2032. The purchase price was $21,933,000. We obtained a 15 year fully-amortizing mortgage loan of $15,350,000 at a fixed interest rate of 4.20%. Annual rental revenue over the remaining term of the lease averages approximately $1,700,000.
On June 28, 2017, we purchased a newly-constructed 237,756 square foot industrial building located in Homestead, FL, which is in the Miami MSA. The building is 100% net leased to FedEx Ground Package System, Inc. for 15 years through March 2032. The purchase price was $38,347,933. We obtained a 15 year fully-amortizing mortgage loan of $24,800,000 at a fixed interest rate of 3.60%. Annual rental revenue over the remaining term of the lease averages approximately $2,282,000.
On June 29, 2017, we purchased a newly constructed 110,361 square foot industrial building located in Oklahoma City, OK. The building is 100% net-leased to Bunzl Distribution Oklahoma, Inc. for seven years through August 2024. The purchase price was $9,000,000. We obtained a 12 year fully-amortizing mortgage loan of $6,000,000 at a fixed interest rate of 4.125%. Annual rental revenue over the remaining term of the lease averages approximately $721,000.
On August 3, 2017, we purchased a newly constructed 354,482 square foot industrial building located in Concord, NC which is in the Charlotte MSA. The building is 100% net leased to FedEx Ground Package System, Inc. for 15 years through May 2032. The purchase price was $40,598,446. We obtained a 15 year fully-amortizing mortgage loan of $26,184,000 at a fixed interest rate of 3.80%. Annual rental revenue over the remaining term of the lease averages approximately $2,537,000.
On September 19, 2017, we purchased a newly constructed 298,472 square foot industrial building located in Kenton, OH. The building is 100% net leased to International Paper Company for 10 years through August 2027. The purchase price was $18,299,032. We obtained a 15 year fully-amortizing mortgage loan of $12,000,000 at a fixed interest rate of 4.45%. Annual rental revenue over the remaining term of the lease averages approximately $1,243,000.
On September 29, 2017, we purchased a newly constructed 219,765 square foot industrial building located in Stow, OH. The building is 100% net leased to Mickey Thompson Performance Tires and Wheels for 10 years through August 2027. The purchase price was $19,500,000. We obtained a 15 year fully-amortizing mortgage loan of $12,700,000 at a fixed interest rate of 4.17%. Annual rental revenue over the remaining term of the lease averages approximately $1,500,000.
We evaluated the property acquisitions which took place subsequentduring the twelve months ended September 30, 2020, to March 31, 2017, under the new framework for determiningdetermine whether an integrated set of assets and activities meets the definition of a business, pursuant to ASU 2017-01, which we early-adopted effective April 1, 2017.
2017-01. Acquisitions that do not meet the definition of a business are accounted for as asset acquisitions. Accordingly, we accounted for theall five properties purchased in Walker (Grand Rapids), MI; Mesquite (Dallas), TX; Aiken (Augusta, GA), SC; Homestead (Miami), FL; Oklahoma City, OK; Concord (Charlotte), NC; Kenton, OH and Stow, OHduring fiscal 2020 as asset acquisitions and allocated the total cash consideration, including transaction costs of approximately $431,000,$179,000, to the individual assets acquired on a relative fair value basis. There were no liabilities assumed in these acquisitions. The financial information set forth below summarizes our purchase price allocation for these eightfive properties acquired during the fiscal year ended September 30, 20172020 that arewere accounted for as asset acquisitions:acquisitions (in thousands):
Land | $ | 23,507,073 | ||
Building | 202,529,177 | |||
In-Place Leases | 4,814,192 |
SCHEDULE OF PROPERTIES ACQUIRED DURING PERIOD ACCOUNTED FOR ASSET ACQUISITIONS
Land | $ | 11,198 | ||
Building | 160,064 | |||
In-Place Leases | 3,999 |
The following table summarizes the operating results included in our consolidated statements of income for the yearsfiscal year ended September 30, 20172020 for the five properties acquired during the yeartwelve months ended September 30, 2017:2020 (in thousands):
Year Ended 9/30/2017 | Year Ended 9/30/2020 | |||||||
Rental Revenues | $ | 7,086,464 | $ | 6,846 | ||||
Net Income Attributable to Common Shareholders | 2,156,885 | |||||||
Net Income (Loss) Attributable to Common Shareholders | 1,624 |
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FedEx Ground Package System, Inc.’s ultimate parent, FDX, International Paper Company and Mickey Thompson Performance Tires and Wheels ultimate parent, Cooper Tire & Rubber Company are publicly-owned companies and financial information related to these entities is available at the SEC’s website,www.sec.gov. Autoneum NorthFedEx Corporation, Magna Seating of America, Inc.’s ultimate parent, Autoneum Holding AG is a publicly-owned companyMagna International Inc. and financial information related to this entity is available at the Swiss Exchange’s website, https://www.six-swiss-exchange.com/index.htmlAmazon are publicly-listed companies that are considered Investment Grade by S&P Global Ratings (www.standardandpoors.com) and Bunzl Distribution Oklahoma, Inc.’s ultimate parent, Bunzl plc is a publicly-owned company and financial information related to this entity is available at the U.K. government’s website, https://www.gov.uk/government/organisations/companies-house.by Moody’s (www.moodys.com). The references in this report to the SEC’s website, the Swiss Exchange’sS&P Global Ratings’ website and the U.K. government’sMoody’s website are not intended to and do not include, or incorporate by reference into this report, the information of S&P Global Ratings or Moody’s on thosesuch websites.
2017 Expansions
On October 1, 2016, a 50,625 square foot expansion of the building leased to FedEx Ground Package System, Inc. located in Edinburg, TX was completed for a cost of approximately $4,762,000, resulting in a new 10 year lease, which extended the prior lease expiration date from September 2021 to September 2026. In addition, the expansion resulted in an increase in annual rent effective from the date of completion of approximately $499,000 from approximately $598,000, or $5.26 per square foot, to approximately $1,097,000, or $6.68 per square foot.
As discussed above, on September 1, 2017, a parking lot expansion for a property leased to FedEx Ground Package System, Inc. located in Ft. Myers, FL was completed for a cost of approximately $862,000, resulting in a new 10 year lease which extended the prior lease expiration date from September 2026 to August 2027. In addition, the expansion resulted in an increase in annual rent effective from the date of completion of approximately $53,000 from approximately $1,365,000, or $6.39 per square foot to approximately $1,418,000, or $6.64 per square foot.
2017 Disposition
During the prior year, in October 2016, we sold our 59,425 square foot industrial building situated on 4.78 acres located in White Bear Lake, MN for net proceeds of approximately $4,126,000, which was approximately our carrying value.
Consolidated Statements of Income for the three fiscal years ended September 30, 2018, 20172021, 2020 and 20162019 of properties sold during the periods presented
On April 15, 2021, we sold our 60,400 square foot building located in Carlstadt, NJ which is in the New York, NY MSA, for gross proceeds of $13.0 million. Prior to the sale, we owned a 51% interest in this property. Our 51% portion of the sale proceeds resulted in a U.S. GAAP net realized gain of approximately $3.3 million, representing a 159% gain over the depreciated U.S. GAAP basis and a net realized gain over our historic undepreciated cost basis of approximately $2.6 million, representing a 96% net gain over our historic undepreciated cost basis.
Prior to the sale, the 49% Non-controlling interest (“NCI”) did not have a material impact on our financial position or results of operations and accordingly was not separately presented in the financial statements. However, upon the sale of the property on April 15, 2021, we presented the effects of the NCI in the Consolidated Statements of Income (Loss) for all periods presented.
Since the sale of the four properties sold during fiscal 2018 (as discussed previously) and the onethis property sold during fiscal 2017, does not represent a strategic shift that has a major effect on our operations and financial results, the results of operations generated from these five propertiesthis property are not included in Discontinued Operations. There were no properties sold during fiscal 2019 or 2020. The following table summarizes (in thousands) the operations of these five properties,this property, prior to their sales,its sale, that areis included in the accompanying Consolidated Statements of Income (Loss) for the three fiscal years ended September 30, 2018, 20172021, 2020 and 2016:2019:
SCHEDULE OF DISPOSITION AND REAL ESTATE CLASSIFIED AS HELD FOR SALE
2021 | 2020 | 2019 | ||||||||||
Rental and Reimbursement Revenue | $ | 467 | $ | 702 | $ | 684 | ||||||
Real Estate Taxes | (62 | ) | (113 | ) | (116 | ) | ||||||
Operating Expenses | (218 | ) | (428 | ) | (50 | ) | ||||||
Depreciation & Amortization | (244 | ) | (149 | ) | (123 | ) | ||||||
Interest Expense | (205 | ) | (75 | ) | (84 | ) | ||||||
Income from Operations | (262 | ) | (63 | ) | 311 | |||||||
Gain on Sale of Real Estate Investment | 6,376 | 0 | 0 | |||||||||
Net Income | 6,114 | (63 | ) | 311 | ||||||||
Less: Net Income (Loss) Attributable to Non-Controlling Interest | 2,996 | (31 | ) | 152 | ||||||||
Net Income (Loss) Attributable to Shareholders | $ | 3,118 | $ | (32 | ) | $ | 159 |
2018 | 2017 | 2016 | ||||||||||
Rental and Reimbursement Revenue | $ | 928,808 | $ | 2,051,835 | $ | 2,138,713 | ||||||
Lease Termination Income | 210,261 | -0- | -0- | |||||||||
Real Estate Taxes | (211,928 | ) | (351,645 | ) | (341,174 | ) | ||||||
Operating Expenses | (109,735 | ) | (169,605 | ) | (104,363 | ) | ||||||
Depreciation & Amortization | (79,137 | ) | (513,879 | ) | (517,554 | ) | ||||||
Interest Expense | (38,272 | ) | (143,510 | ) | (221,595 | ) | ||||||
Income from Operations | 699,997 | 873,196 | 954,027 | |||||||||
Gain (Loss) on Sale of Real Estate Investment | 7,485,266 | (95,336 | ) | -0- | ||||||||
Net Income | $ | 8,185,263 | $ | 777,860 | $ | 954,027 |
Pro forma information (unaudited)
The following unaudited pro formapro-forma condensed financial information has been prepared utilizing our historical financial statements, the effect of the reduction of revenue and expenses that will no longer be generated from a property that was sold on April 15, 2021 and the effect of additional revenue and expenses generated from the properties acquired and expanded subsequent to our fiscal yearend (see Note 17) and from the properties acquired and expanded during fiscal years 20182021 and 2017,fiscal 2020, assuming that thesethe property acquisitions, and these completed expansions and the sale of one property had occurred as of October 1, 2016,2019, after giving effect to certain adjustments including: (a) Rental Revenue adjustments resulting from the straight-lining of scheduled rent increases, (b) Interest Expense resulting from the assumed increase in Fixed Rate Mortgage Notes Payable and Loans Payable related to the new acquisitions, and (c) Depreciation Expense related to the new acquisitions. As further described in Note 13,acquisitions and expansions. Furthermore, the net proceeds raised from the issuance of our 6.125% Series C Cumulative Redeemable Preferred Stock less the redemptions of our 7.625% Series A Cumulative Redeemable Preferred Stock redeemed on October 14, 2016 and our 7.875% Series B Cumulative Redeemable Preferred Stock redeemed on June 7, 2017 were used to help fund property acquisitions and, therefore, the pro forma preferred dividend expense has been adjusted to account for its effect on Net Income Attributable to Common Shareholders as if all the preferred stock issuances and redemptions had occurred on October 1, 2016. In addition, Net Income Attributable to Common Shareholders excludes the operating expenses incurred during fiscal 2018 and 2017 for the five properties that were sold during the periods presented. Furthermore, the proceeds raised from the Dividend Reinvestment and Stock Purchase Plan (the DRIP) were used to fund property acquisitions and expansions and therefore, the weighted average shares outstanding used in calculating the pro-forma Basic and Diluted Net Income (Loss) per Share Attributable to Common Shareholders has been adjusted to account for the increase in shares raised throughissued pursuant to the DRIP, as if all such shares have been issued on October 1, 2019. Additionally, the net proceeds raised from the issuance of additional shares raisedof our 6.125% Series C Cumulative Redeemable Preferred Stock, $ par value per share (6.125% Series C Preferred Stock), through our At-The-Market Sales Agreement Program were used to help fund property acquisitions and, therefore, the pro-forma preferred dividend has been adjusted to account for its effect on pro-forma Net Income (Loss) Attributable to Common Shareholders as if all the preferred stock issuances had occurred on October 1, 2016.2019. The unaudited pro formapro-forma condensed financial information is not indicative of the results of operations that would have been achieved had the acquisitions and expansions reflected herein been consummated on the dates indicated or that will be achieved in the future.
Fiscal Year 2018 | Fiscal Year 2017 | |||||||
Rental Revenues | $ | 130,401,800 | $ | 130,644,200 | ||||
Net Income Attributable to Common Shareholders | 31,382,200 | 26,411,000 | ||||||
Basic Net Income per Share Attributable to Common Shareholders | $ | 0.39 | $ | 0.32 | ||||
Diluted Net Income per Share Attributable to Common Shareholders | $ | 0.38 | $ | 0.32 |
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SCHEDULE OF PRO FORMA INFORMATION
Fiscal Year Ended (in thousands, except per share amounts) | ||||||||||||||||
2021 | 2020 | |||||||||||||||
As Reported | Pro-forma | As Reported | Pro-forma | |||||||||||||
Rental Revenue | $ | 155,044 | $ | 163,097 | $ | 141,583 | $ | 162,463 | ||||||||
Net Income (Loss) Attributable to Common Shareholders | $ | 44,764 | $ | 43,020 | $ | (48,617 | ) | $ | (50,443 | ) | ||||||
Basic Net Income (Loss) per Share Attributable to Common Shareholders | $ | 0.46 | $ | 0.44 | $ | (0.50 | ) | $ | (0.51 | ) | ||||||
Diluted Net Income (Loss) per Share Attributable to Common Shareholders | $ | 0.45 | $ | 0.44 | $ | (0.50 | ) | $ | (0.51 | ) |
NOTE 4 – INTANGIBLE ASSETS
Net intangible assets consist of the estimated value of the acquired in-place leases and the acquired above market rent leases at acquisition for the following properties and are amortized over the remaining term of the lease:lease. Intangible Assets, net of Accumulated Amortization is made up of the following balances as of September 30, 2021 and 2020 (in thousands):
SCHEDULE OF INTANGIBLE ASSETS UNDER LEASES IN-PLACE ACQUISITION
September 30, 2018 | September 30, 2017 | As of 9/30/21 | As of 9/30/20 | |||||||||||||
Topeka, KS | $ | 102,867 | $ | 137,156 | $ | 0 | $ | 34 | ||||||||
Carrollton (Dallas), TX | 2,283 | 9,134 | ||||||||||||||
Ft. Mill (Charlotte, NC), SC | 91,595 | 183,191 | ||||||||||||||
Lebanon (Nashville), TN | 119,926 | 140,783 | 57 | 78 | ||||||||||||
Rockford, IL (Sherwin-Williams Co.) | 105,293 | 125,349 | 45 | 65 | ||||||||||||
Edinburg, TX | 166,122 | 223,078 | 0 | 52 | ||||||||||||
Corpus Christi, TX | 66,912 | 89,853 | 0 | 21 | ||||||||||||
Halfmoon (Albany), NY | 157,578 | 207,339 | ||||||||||||||
Lebanon (Cincinnati), OH | 54,402 | 147,663 | ||||||||||||||
Olive Branch (Memphis, TN), MS (Anda Pharmaceuticals) | 703,205 | 886,650 | 153 | 336 | ||||||||||||
Livonia (Detroit), MI | 239,464 | 307,882 | 34 | 103 | ||||||||||||
Stewartville (Rochester), MN | 21,984 | 26,695 | 8 | 13 | ||||||||||||
Buckner (Louisville), KY | 329,941 | 351,816 | 264 | 286 | ||||||||||||
Edwardsville (Kansas City), KS (International Paper) | 366,666 | 441,243 | 143 | 218 | ||||||||||||
Lindale (Tyler), TX | 201,312 | 236,323 | 96 | 131 | ||||||||||||
Sauget (St. Louis, MO), IL | 22,545 | 24,659 | 16 | 18 | ||||||||||||
Rockford, IL (Collins Aerospace Systems) | 68,348 | 76,159 | 45 | 53 | ||||||||||||
Kansas City, MO | 15,325 | 20,434 | 0 | 5 | ||||||||||||
Monroe, OH (Cincinnati) | 364,530 | 396,460 | 269 | 301 | ||||||||||||
Cincinnati, OH | 39,246 | 42,814 | 28 | 32 | ||||||||||||
Imperial, PA (Pittsburgh) | 61,617 | 70,116 | ||||||||||||||
Burlington, WA (Seattle/Everett) | 375,265 | 406,756 | ||||||||||||||
Imperial (Pittsburgh), PA | 36 | 45 | ||||||||||||||
Burlington (Seattle/Everett), WA | 281 | 312 | ||||||||||||||
Colorado Springs, CO | 278,699 | 316,703 | 165 | 202 | ||||||||||||
Hamburg (Buffalo), NY | 215,517 | 232,759 | 164 | 181 | ||||||||||||
Ft. Myers, FL | 184,272 | 194,209 | 122 | 143 | ||||||||||||
Walker (Grand Rapids), MI | 448,835 | 482,498 | 348 | 382 | ||||||||||||
Aiken (Augusta, GA), SC | 854,091 | 916,969 | 665 | 728 | ||||||||||||
Mesquite (Dallas), TX | 737,832 | 792,486 | 574 | 628 | ||||||||||||
Homestead (Miami), FL | 513,201 | 551,216 | 399 | 437 | ||||||||||||
Oklahoma City, OK (Bunzl) | 240,468 | 281,110 | 118 | 159 | ||||||||||||
Concord (Charlotte), NC | 581,352 | 623,890 | 454 | 496 | ||||||||||||
Kenton, OH | 438,035 | 487,160 | ||||||||||||||
Stow, OH | 521,166 | 579,612 | ||||||||||||||
Charleston, SC (FDX) | 377,988 | -0- | ||||||||||||||
Oklahoma City, OK (Amazon) | 669,693 | -0- | ||||||||||||||
Savannah, GA | 1,402,816 | -0- | ||||||||||||||
Daytona Beach, FL | 765,687 | -0- | ||||||||||||||
Mobile, AL | 1,016,789 | -0- | ||||||||||||||
Charleston, SC (FDX Ground) | 667,358 | -0- | ||||||||||||||
Braselton (Atlanta), GA | 999,531 | -0- | ||||||||||||||
Total Intangible Assets, net of Accumulated Amortization | $ | 14,589,756 | $ | 10,010,165 |
88 |
As of 9/30/21 | As of 9/30/20 | |||||||
Kenton, OH | $ | 291 | $ | 340 | ||||
Stow, OH | 346 | 404 | ||||||
Charleston, SC (FDX) | 296 | 324 | ||||||
Oklahoma City, OK (Amazon) | 448 | 522 | ||||||
Savannah, GA (Shaw) | 935 | 1,091 | ||||||
Daytona Beach, FL | 524 | 604 | ||||||
Mobile, AL | 717 | 817 | ||||||
Charleston, SC (FDX Ground) | 532 | 577 | ||||||
Braselton (Atlanta), GA | 792 | 861 | ||||||
Trenton, NJ | 1,192 | 1,303 | ||||||
Savannah, GA (FDX Ground) | 261 | 298 | ||||||
Lafayette, IN | 375 | 424 | ||||||
Greenwood (Indianapolis), IN (Amazon) | 1,861 | 2,005 | ||||||
Lancaster (Columbus), OH | 299 | 335 | ||||||
Whitsett (Greensboro), NC | 897 | 963 | ||||||
Ogden (Salt Lake City), UT | 215 | 232 | ||||||
Oklahoma City, OK (Amazon II) | 246 | 273 | ||||||
Plain City (Columbus), OH | 1,527 | 0 | ||||||
Locust Grove (Atlanta), GA | 3,108 | 0 | ||||||
Burlington, VT | 1,048 | 0 | ||||||
Kodak (Knoxville), TN | 565 | 0 | ||||||
Total Intangible Assets, net of Accumulated Amortization | $ | 20,959 | $ | 16,832 |
Amortization expense related to the intangible assets attributable to acquired in-place leases was $1,510,660, $969,751$2.2 million, $2.0 million and $1,076,776$1.9 million for the years ended September 30, 2018, 20172021, 2020 and 2016,2019, respectively. We estimate that the aggregate amortization expense for these existing intangible assets will be approximately $1,737,000, $1,589,000, $1,582,000, $1,431,000,$2.3 million, $2.1 million, $2.0 million, $1.9 million, and $1,263,000$1.9 million for each of the fiscal years 2019, 2020, 2021, 2022, 2023, 2024, 2025 and 2023,2026, respectively. The amount that is being amortized into rental revenue related to the intangible assets attributable to acquired above market leases was $102,708$103,000 for the year ended September 30, 2018 and $101,968 for each of the years ended September 30, 20172021, 2020 and 2016, respectively.2019. We estimate that the aggregate amount that will be amortized into rental revenue for existing intangible assets will be approximately $103,000$34,000 for each of the fiscal years 2019, 2020 and 2021 and will be approximately $34,000 for the fiscal year 2022.
NOTE 5 – SIGNIFICANT CONCENTRATIONS OF CREDIT RISK
As of September 30, 2018,2021, we had approximately 21,174,00024.9 million square feet of property, of which approximately 10,083,00011.6 million square feet, or 48%47%, consisting of 6065 separate stand-alone leases, were leased to FedEx Corporation (FDX) and its subsidiaries (7%(5% to FDX and 41%42% to FDX subsidiaries). These properties are located in 2427 different states. As of September 30, 2018,2021, the 6065 separate stand-alone leases that are leased to FDX and FDX subsidiaries had a weighted average lease maturity of 9.47.5 years. As of September 30, 2018,2021, in addition to FDX and its subsidiaries, the only tenants that leased 5%5% or more of our total square footage were FDX and its subsidiaries.subsidiaries of Amazon, which are parties to five separate stand-alone leases for properties located in four different states, containing 1.5 million total square feet, comprising 6% of our total leasable square feet. None of our properties are subject to a master lease or any cross-collateralization agreements. The tenants that leased more than 5% of total rentable square footage as of September 30, 2018, 2017,2021, 2020, and 20162019 were as follows:
SCHEDULE OF CONCENTRATION OF RISK
2018 | 2017 | 2016 | 2021 | 2020 | 2019 | |||||||||||||||||||
FDX and Subsidiaries | 48 | % | 50 | % | 47 | % | 47% | 46% | 47% | |||||||||||||||
Milwaukee Electric Tool Corporation (lease commenced fiscal 2013, expanded fiscal 2016) | <5% | 5 | % | 5 | % | |||||||||||||||||||
Subsidiaries of Amazon | 6% | 6% | <5% |
During fiscal 2018,2021, the only tenanttenants that accounted for 5%5% or more of our rental and reimbursement revenue waswere FDX (including its subsidiaries). and subsidiaries of Amazon. Our rental and reimbursement revenue from FDX and its subsidiaries for the fiscal years ended September 30, 2018, 20172021, 2020 and 2016,2019, respectively, totaled approximately $80,726,000, $68,151,000$104.3 million, $96.4 million and $52,793,000,$93.3 million, or 58% (7% from FDX and 51% from FDX subsidiaries), 59% (7% from FDX and 52% from FDX subsidiaries) and 55% (9% from FDX and 46% from FDX subsidiaries),calculated as a percentage of total rent and reimbursement revenues. revenues were, 57% (5% from FDX and 52% from FDX subsidiaries), 58% (5% from FDX and 53% from FDX subsidiaries) and 60% (5% from FDX and 55% from FDX subsidiaries). Subsidiaries of Amazon represented 6% of our Rental and Reimbursement Revenue for the fiscal year ended September 30, 2021 and 2020. Rental and Reimbursement Revenue from subsidiaries of Amazon for the fiscal year ended September 30, 2019 was less than 5% of our Rental and Reimbursement Revenue. No other tenant accounted for 5% or more of our total Rental and Reimbursement revenue for the fiscal years ended September 30, 2018, 20172021, 2020 and 2016.2019.
In addition
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FDX and Amazon are rated “BBB” and “AA”, respectively by S&P Global Ratings (www.standardandpoors.com) and are rated “Baa2” and “A1”, respectively by Moody’s (www.moodys.com), which are both considered “Investment Grade” ratings. The references in this report to real estate property holdings, we held $154,920,545 inthe SEC’s website, S&P Global Ratings’ website and Moody’s website are not intended to and do not include, or incorporate by reference into this report, the information of FDX, Amazon, S&P Global Ratings or Moody’s on such websites.
NOTE 6 – SECURITIES AVAILABLE FOR SALE
Our Securities Available for Sale at Fair Value consists primarily of marketable REIT securities atcommon and preferred stock of other REITs with a fair value of $143.5 million as of September 30, 2018, representing 8.0%2021. We intend to limit the size of this portfolio to no more than approximately 5% of our undepreciated assets, (which is ourwhich we define as total assets excluding accumulated depreciation). These liquid real estate holdings are not included in calculating the tenant concentration ratios above and therefore further increasedepreciation. We continue to believe that our diversification. TheREIT securities portfolio provides us with additional diversification, income, a source of potential liquidity when needed and income, andalso serves as a proxy for real estate when more favorable risk adjusted returns are not available.
NOTE 6available in the private real estate markets. Our decision to reduce this threshold mainly stems from the implementation of accounting rule ASU 2016-01, “Financial Instruments – SECURITIES AVAILABLE FOR SALE
Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”, which took effect at the beginning of fiscal 2019. This new rule requires that quarterly changes in the market value of our marketable securities flow through our Consolidated Statements of Income (Loss). The implementation of this accounting rule has resulted in increased volatility in our reported earnings and some of our key performance metrics. Total assets excluding accumulated depreciation were $2.6 billion as of September 30, 2021. Our securities available for sale consist primarily of marketable common and preferred stock securities of other REITs. We generally limit our$143.5 million investment in marketable REIT securities to be no more than approximately 10%as of September 30, 2021 represented 5.6% of our undepreciated assets (which isassets.
During the fiscal year ended September 30, 2021, our total assets excluding accumulated depreciation).preferred stock investment in UMH’s 8.00% Series B Cumulative Redeemable Preferred Stock was redeemed and called for redemption at its liquidation value, which was equal to our cost basis. In addition, during the fiscal year ended September 30, 2021, we also sold marketable REIT securities for gross proceeds totaling $16.3 million with an original cost basis of $14.1 million, resulting in a realized gain of $2.2 million. During the fiscal year ended September 30, 2020, one of our preferred stock investments was called for redemption at its liquidation value, which was equal to our cost basis. Other than these two Preferred Stock redemptions and the sales of securities that took place during fiscal 2021, there have been no open market purchases or sales of securities during the fiscal years ended September 30, 2021, 2020 and 2019. We do not own more than 10%recorded the following realized Gain on Sale of Securities Transactions for the outstanding sharesfiscal years ended September 30 (in thousands):
SCHEDULE OF GAIN (LOSS) ON SECURITIES TRANSACTIONS, NET
2021 | 2020 | 2019 | ||||||||||
Gross realized gains | $ | 2,248 | $ | 0 | $ | 0 | ||||||
Gross realized losses | 0 | 0 | 0 | |||||||||
Gains on Sale of Securities Transactions, net | $ | 2,248 | $ | 0 | $ | 0 |
We recognized dividend income from our portfolio of anyREIT investments for the fiscal years ended September 30, 2021, 2020 and 2019 of these issuers, nor do we have a controlling financial interest.$6.2 million, $10.4 million and $15.2 million, respectively. As of September 30, 2021, we had total net unrealized holding losses on our securities portfolio of $76.6 million. As a result of the adoption of ASU 2016-01, On October 1, 2018, we held $154,920,545recorded a $(24.7) million adjustment to beginning Undistributed Income (Loss). In addition, $50.2 million, $(77.4) million and $(24.7) million of the net unrealized holding gains (losses) have been reflected as Unrealized Holding Gains (Losses) Arising During the Periods in marketable REIT securities, representing 8.0%the accompanying Consolidated Statements of our undepreciated assets.Income (Loss) for the fiscal years ended 2021, 2020 and 2019, respectively. The components of the Unrealized Holding Gains (Losses) Arising During the Periods included in the accompanying Consolidated Statements of Income (Loss) for the fiscal years ended September 30 (in thousands) are as follows:
SCHEDULE OF UNREALIZED LOSS ON INVESTMENTS
2021 | 2020 | 2019 | ||||||||||
Unrealized Holding Gains (Losses) | $ | 52,487 | $ | (77,380 | ) | $ | (24,680 | ) | ||||
Reclassification Adjustment for Net (Gains) Realized in Income | (2,248 | ) | 0 | 0 | ||||||||
Unrealized Holding Gains (Losses) Arising During the Period | $ | 50,239 | $ | (77,380 | ) | $ | (24,680 | ) |
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We normally hold REIT securities long-term and have the ability and intent to hold these securities to recovery. We have total net unrealized losses ondetermined that none of our securities portfolio of $24,744,579 as of September 30, 2018.
We held eight securities that we determined were temporarily impaired investments as of September 30, 2018. We consider many factors in determining whether a security isholdings are other than temporarily impaired includingand therefore all unrealized gains and losses from these securities have been recognized as Unrealized Holding Gains (Losses) Arising During the naturePeriods in our Consolidated Statements of the security and the cause, severity and durationIncome (Loss). If we were to determine any of the impairment. The following is a summary ofour securities to be other than temporarily impaired, securities at September 30, 2018:we would present these unrealized holding losses as an impairment charge in our Consolidated Statements of Income (Loss).
Less than 12 Months | 12 Months or Longer | |||||||||||||||
Unrealized | Unrealized | |||||||||||||||
Description of Securities | Fair Value | Losses | Fair Value | Losses | ||||||||||||
Preferred stock | $ | 3,194,000 | $ | (1,613,782 | ) | $ | -0- | $ | -0- | |||||||
Common stock | 93,367,200 | (30,622,150 | ) | -0- | -0- | |||||||||||
Total | $ | 96,561,200 | $ | (32,235,932 | ) | $ | -0- | $ | -0- |
The following is a summary of the range of losses:
Number of Individual Securities |
Fair Value |
Unrealized Losses | % Loss | |||||||||
2 | $ | 21,980,000 | $ | (351,051 | ) | 0-5 | % | |||||
2 | 31,996,000 | (3,562,067 | ) | 6-10 | % | |||||||
1 | 5,593,000 | (825,791 | ) | 13 | % | |||||||
2 | 21,032,200 | (9,931,597 | ) | 30-40 | % | |||||||
1 | 15,960,000 | (17,565,426 | ) | 52 | % | |||||||
8 | $ | 96,561,200 | $ | (32,235,932 | ) |
We had a $26,608,676 and $10,091,417 margin loan balance as of September 30, 2018 and 2017, respectively. The margin loan balance is collateralized by the securities portfolio. Subsequent to fiscal yearend, on October 9, 2018, we paid off the margin loan.
Dividend income for the fiscal years ended September 30, 2018, 2017 and 2016 totaled $13,099,317, $6,919,973, and $5,607,403, respectively.
We received proceeds of $2,620,166, $17,274,946 and $22,774,768 on sales or redemptions of securities available for sale during fiscal years 2018, 2017 and 2016, respectively. We recorded the following realized Gain on Sale of Securities Transactions, net for the fiscal years ended September 30:
2018 | 2017 | 2016 | ||||||||||
Gross realized gains | $ | 112,272 | $ | 2,320,561 | $ | 4,403,724 | ||||||
Gross realized losses | (885 | ) | (8,847 | ) | (5,125 | ) | ||||||
Gains on Sale of Securities Transactions, net | $ | 111,387 | $ | 2,311,714 | $ | 4,398,599 |
The following is a listing of our investments in securities at September 30, 2018:2021 (in thousands):
SUMMARY OF INVESTMENTS IN DEBT AND EQUITY SECURITIES
Description | Series | Interest Rate/ Dividend | Number of Shares | Cost | Fair Value | |||||||||||||||
Equity Securities - Preferred Stock: | ||||||||||||||||||||
CBL & Associates Properties, Inc. | D | 7.375 | % | 400 | $ | 7,967 | $ | 640 | ||||||||||||
Cedar Realty Trust, Inc. | B | 7.25 | % | 6 | 136 | 148 | ||||||||||||||
iStar Inc. | D | 8.00 | % | 10 | 232 | 262 | ||||||||||||||
iStar Inc. | I | 7.50 | % | 60 | 1,301 | 1,533 | ||||||||||||||
Pennsylvania Real Estate Investment Trust | D | 6.875 | % | 120 | 2,150 | 1,524 | ||||||||||||||
Pennsylvania Real Estate Investment Trust | B | 7.375 | % | 120 | 2,216 | 1,643 | ||||||||||||||
Total Equity Securities - Preferred Stock | $ | 14,002 | $ | 5,750 |
Description | Series | Interest Rate/ Dividend | Number of Shares | Cost | Estimated Market Value | ||||||||||||||
Equity Securities - Preferred Stock: | |||||||||||||||||||
CBL & Associates Properties, Inc. | D | 7.375 | % | 200,000 | $ | 4,807,782 | $ | 3,194,000 | |||||||||||
Cedar Realty Trust, Inc. | B | 7.25 | % | 5,789 | 135,893 | 143,277 | |||||||||||||
Dynex Capital, Inc. | A | 8.50 | % | 10,000 | 250,000 | 254,400 | |||||||||||||
iStar Financial, Inc. | D | 8.00 | % | 3,468 | 71,502 | 86,492 | |||||||||||||
iStar Financial, Inc. | I | 7.50 | % | 41,383 | 872,236 | 1,005,603 | |||||||||||||
UMH Properties, Inc. (1) | B | 8.00 | % | 100,000 | 2,500,000 | 2,625,700 | |||||||||||||
Total Equity Securities - Preferred Stock | $ | 8,637,413 | $ | 7,309,472 |
Description | Number of Shares | Cost | Fair Value | |||||||||
Equity Securities - Common Stock: | ||||||||||||
CBL & Associates Properties, Inc. | 4,000 | $ | 33,525 | $ | 736 | |||||||
Diversified Healthcare Trust | 1,100 | 17,871 | 3,729 | |||||||||
Franklin Street Properties Corp. | 1,000 | 8,478 | 4,640 | |||||||||
Kimco Realty Corporation | 1,700 | 27,937 | 35,275 | |||||||||
Office Properties Income Trust | 659 | 37,892 | 16,692 | |||||||||
Pennsylvania Real Estate Investment Trust | 1,800 | 13,443 | 3,492 | |||||||||
Tanger Factory Outlet Centers, Inc. | 600 | 12,300 | 9,780 | |||||||||
VEREIT, Inc. | 700 | 27,891 | 31,661 | |||||||||
Washington Prime Group Inc. | 167 | 11,860 | 135 | |||||||||
UMH Properties, Inc. (1) | 1,381 | 14,870 | 31,614 | |||||||||
Total Equity Securities - Common Stock | $ | 206,067 | $ | 137,754 |
Description | Number of Shares | Cost | Estimated Market Value | |||||||||
Equity Securities - Common Stock: | ||||||||||||
CBL & Associates Properties, Inc. | 4,000,000 | $ | 33,525,425 | $ | 15,960,000 | |||||||
Franklin Street Properties | 700,000 | 6,418,791 | 5,593,000 | |||||||||
Government Properties Income Trust | 1,580,000 | 26,156,016 | 17,838,200 | |||||||||
Industrial Logistics Property Trust | 100,000 | 2,116,778 | 2,301,000 | |||||||||
Kimco Realty Corporation | 1,200,000 | 20,337,749 | 20,088,000 | |||||||||
Pennsylvania Real Estate Investment Trust | 200,000 | 1,993,302 | 1,892,000 | |||||||||
Select Income REIT | 800,000 | 17,394,728 | 17,552,000 | |||||||||
Senior Housing Property Trust | 900,000 | 15,463,221 | 15,804,000 | |||||||||
VEREIT, Inc. | 3,100,000 | 25,016,451 | 22,506,000 | |||||||||
Washington Prime Group, Inc. | 1,300,000 | 10,541,616 | 9,490,000 | |||||||||
UMH Properties, Inc. (1) | 1,188,220 | 12,060,637 | 18,583,765 | |||||||||
Total Equity Securities - Common Stock | $ | 171,024,714 | $ | 147,607,965 |
Description | Interest Rate/ Dividend | Number of Shares | Cost | Fair Value | ||||||||||||
Modified Pass-Through Mortgage-Backed Securities: | ||||||||||||||||
Government National Mortgage Association (GNMA) | 6.50 | % | 500 | $ | 1 | $ | 1 | |||||||||
Total Securities Available for Sale | $ | 220,070 | $ | 143,505 |
Interest Rate/ Dividend | Number of Shares | Cost | Estimated Market Value | |||||||||||||
Modified Pass-Through Mortgage-Backed Securities: | ||||||||||||||||
Government National Mortgage Association (GNMA) | 6.50 | % | 500,000 | $ | 2,997 | $ | 3,108 | |||||||||
Total Securities Available for Sale | $ | 179,665,124 | $ | 154,920,545 |
(1) | Investment is in a related company. See Note No. 11 for further discussion. |
(1) Investment is in a related company. See Note No. 11 for further discussion.
91 |
The following is a listing of our investments in securities at September 30, 2017:2020 (in thousands):
Description | Series | Interest Rate/ Dividend | Number of Shares | Cost | Estimated Market Value | ||||||||||||||
Equity Securities - Preferred Stock: | |||||||||||||||||||
CBL & Associates Properties, Inc. | D | 7.375 | % | 200,000 | $ | 4,807,782 | $ | 4,888,000 | |||||||||||
Cedar Realty Trust, Inc. | B | 7.25 | % | 13,153 | 308,759 | 332,508 | |||||||||||||
Dynex Capital, Inc. | A | 8.50 | % | 10,000 | 250,000 | 252,500 | |||||||||||||
Investors Real Estate Trust | B | 7.95 | % | 20,000 | 500,000 | 501,796 | |||||||||||||
iStar Financial, Inc. | D | 8.00 | % | 3,468 | 71,502 | 87,744 | |||||||||||||
iStar Financial, Inc. | E | 7.875 | % | 3,400 | 54,116 | 85,510 | |||||||||||||
iStar Financial, Inc. | F | 8.00 | % | 20,000 | 429,846 | 503,200 | |||||||||||||
iStar Financial, Inc. | I | 7.50 | % | 41,383 | 872,236 | 1,038,713 | |||||||||||||
Pennsylvania Real Estate Investment Trust | A | 8.25 | % | 44,000 | 1,100,885 | 1,107,040 | |||||||||||||
Summit Hotel Properties, Inc. | B | 7.875 | % | 10,000 | 250,000 | 255,617 | |||||||||||||
UMH Properties, Inc. (1) | B | 8.00 | % | 100,000 | 2,500,000 | 2,766,000 | |||||||||||||
Total Equity Securities - Preferred Stock | $ | 11,145,126 | $ | 11,818,628 |
Description | Series | Interest Rate/ Dividend | Number of Shares | Cost | Fair Value | |||||||||||||||
Equity Securities - Preferred Stock: | ||||||||||||||||||||
CBL & Associates Properties, Inc. | D | 7.375 | % | 400 | $ | 7,967 | $ | 304 | ||||||||||||
Cedar Realty Trust, Inc. | B | 7.25 | % | 6 | 136 | 109 | ||||||||||||||
iStar Inc. | D | 8.00 | % | 10 | 232 | 253 | ||||||||||||||
iStar Inc. | I | 7.50 | % | 60 | 1,301 | 1,452 | ||||||||||||||
Pennsylvania Real Estate Investment Trust | D | 6.875 | % | 120 | 2,150 | 610 | ||||||||||||||
Pennsylvania Real Estate Investment Trust | B | 7.375 | % | 120 | 2,216 | 606 | ||||||||||||||
UMH Properties, Inc. (1) (2) | B | 8.00 | % | 100 | 2,500 | 2,526 | ||||||||||||||
Total Equity Securities - Preferred Stock | $ | 16,502 | $ | 5,860 |
Description | Number of Shares | Cost | Estimated Market Value | Number of Shares | Cost | Fair Value | ||||||||||||||||||
Equity Securities - Common Stock: | ||||||||||||||||||||||||
CBL & Associates Properties, Inc. | 2,700,000 | $ | 25,348,070 | $ | 22,653,000 | 4,000 | $ | 33,525 | $ | 644 | ||||||||||||||
Franklin Street Properties | 250,000 | 2,511,460 | 2,655,000 | |||||||||||||||||||||
Government Properties Income Trust | 1,070,000 | 19,295,940 | 20,083,900 | |||||||||||||||||||||
Diversified Healthcare Trust | 1,100 | 17,871 | 3,872 | |||||||||||||||||||||
Five Star Senior Living Inc. | 75 | 290 | 378 | |||||||||||||||||||||
Franklin Street Properties Corp. | 1,000 | 8,478 | 3,660 | |||||||||||||||||||||
Industrial Logistics Property Trust | 700 | 13,789 | 15,309 | |||||||||||||||||||||
Kimco Realty Corporation | 1,700 | 27,937 | 19,142 | |||||||||||||||||||||
Office Properties Income Trust | 659 | 37,892 | 13,655 | |||||||||||||||||||||
Pennsylvania Real Estate Investment Trust | 100,000 | 1,028,213 | 1,049,000 | 1,800 | 13,443 | 997 | ||||||||||||||||||
Select Income REIT | 620,000 | 13,907,816 | 14,520,400 | |||||||||||||||||||||
Senior Housing Property Trust | 700,000 | 12,325,801 | 13,685,000 | |||||||||||||||||||||
Tanger Factory Outlet Centers, Inc. | 600 | 12,300 | 3,618 | |||||||||||||||||||||
VEREIT, Inc. | 1,880,000 | 15,967,690 | 15,585,200 | 3,500 | 27,891 | 22,750 | ||||||||||||||||||
Washington Prime Group, Inc. | 500,000 | 4,428,175 | 4,165,000 | |||||||||||||||||||||
Washington Prime Group Inc. | 1,500 | 11,860 | 971 | |||||||||||||||||||||
UMH Properties, Inc. (1) | 1,128,315 | 11,231,851 | 17,545,306 | 1,328 | 13,858 | 17,975 | ||||||||||||||||||
Total Equity Securities - Common Stock | $ | 106,045,016 | $ | 111,941,806 | $ | 219,134 | $ | 102,971 |
Interest Rate/ Dividend | Number of Shares | Cost | Estimated Market Value | |||||||||||||||||||||||||||||
Description | Interest Rate/ Dividend | Number of Shares | Cost | Fair Value | ||||||||||||||||||||||||||||
Modified Pass-Through Mortgage-Backed Securities: | ||||||||||||||||||||||||||||||||
Government National Mortgage Association (GNMA) | 6.50 | % | 500,000 | $ | 4,063 | $ | 4,336 | 6.50 | % | 500 | $ | 1 | $ | 1 | ||||||||||||||||||
Total Securities Available for Sale | $ | 117,194,205 | $ | 123,764,770 | $ | 235,637 | $ | 108,832 |
(1) | Investment is in a related company. See Note No. 11 for further discussion. |
(2) | Subsequent to fiscal yearend 2020, UMH redeemed all their 8.00% Series B Cumulative Redeemable Preferred Stock at a cash redemption price of $ per share, plus all accrued and unpaid dividends. |
(1) Investment is in a related company. See Note No. 11 for further discussion.
92 |
NOTE 7- MORTGAGE NOTES AND LOANS PAYABLE
Mortgage Notes Payable:
As of September 30, 2021, we owned 122 properties, of which 60 carried Fixed Rate Mortgage Notes Payable represents thewith outstanding principal amounts outstanding as of September 30, 2018.balances totaling $839.6 million. Interest is payable on these mortgages at fixed rates ranging from 3.45%2.95% to 7.60%6.75%, with a weighted average interest rate of 4.07%3.86%. This compares to a weighted average interest rate of 4.18%3.98% as of September 30, 2017.2020. As of September 30, 2018,2021, the weighted average loan maturity of the Mortgage Notes Payable was 11.7 years.10.9 years. This compares to a weighted average loan maturity of the Mortgage Notes Payable of 11.611.1 years as of September 30, 2017.2020.
As described in Note 3, during fiscal year ended September 30, 2018,2021, we entered into seventwo mortgages in connection with two of the four acquisitions of properties in Charleston, SC (FDX); Oklahoma City, OK; Savannah, GA; Daytona Beach, FL; Mobile, AL, Charleston, SC (FDX Ground) and Braselton (Atlanta), GA.we acquired during the 2021 fiscal year. These seventwo mortgages consisted of four one 15 year fully-amortizing mortgage loans, two 14loan and one 17 year fully-amortizing mortgage loans and one 10 year loan amortizing over 18 years.loan. These seventwo mortgage loans originally totaled $175,160,000,$104.0 million, with an original weighted average mortgage loan maturity of 14.116.1 years andwith interest rates ranging from 2.95% to 3.25% resulting in a weighted average interest rate of 3.91%3.11%. In connection with the remaining two properties acquired during the 2021 fiscal year, we entered into commitments for two, 15 year, fully-amortizing mortgage loans. These four fully-amortizing loans have a weighted average term of 15.7 years. The principal amount of the four mortgage loans originally totaled $161.8 million with fixed interest rates ranging from 2.50% to 3.25%, resulting in a weighted average fixed interest rate of 2.89%.
Subsequent to fiscal yearend, on October 27, 2021, we purchased a newly constructed 291,000 square foot industrial building, situated on 46.0 acres, located in the Birmingham, AL MSA. The building is 100% net-leased to FedEx Ground Package System, Inc. for 15 years through July 2036. The property was acquired for a purchase price of $30.2 million. Annual rental revenue over the remaining term of the lease averages $1.7 million. We obtained a mortgage loan commitment for a 15 year, fully-amortizing mortgage loan of $19.3 million at a fixed interest rate of 2.40%, which has not yet closed.
During the fiscal year ended September 30, 2018,2021, we fully repaid theprepaid four self-amortizing mortgage loans for five of our properties located in Colorado Springs, CO; RichfieldCarlstadt, NJ, Houston, TX, Kansas City, KS and Topeka, KS. These loans were at a weighted average interest rate of 5.35%. Subsequent to fiscal yearend, on November 1, 2021, we fully prepaid a $7.3 million mortgage loan for our property located in Streetsboro (Cleveland), OH; Tampa, FL; West Chester Twp. (Cincinnati), OH and Orlando, FL, totaling approximately $12,487,000.OH. The loan had an interest rate of 5.5%.
During the fiscal year ended September 30, 2017,2020, we fully repaid 16two self-amortizing mortgage loans associated with 15 offor our properties located in Jacksonville, FL; El Paso, TX; Lebanon (Cincinnati), OH; Halfmoon (Albany), NY; Bedford Heights (Cleveland), OH; Hanahan (Charleston), SC; Elgin (Chicago), IL; Kansas City, MO; Chattanooga, TN; Roanoke, VA; Orion, MI; Edwardsville, KS; Punta Gorda, FL; Cheektowaga (Buffalo), NYAugusta, GA and Cocoa, FL, totaling approximately $40,037,000.Huntsville, AL. These loans were at a weighted average interest rate of 5.52%.
The following is a summary of our Fixed Rate Mortgage Notes Payable as of September 30, 20182021 and 2017:2020 (in thousands):
SUMMARY OF FIXED RATE MORTGAGE NOTES PAYABLE
Amount | Weighted Average Interest Rate (1) | Amount | Weighted Average Interest Rate (1) | |||||||||||||||||||||||||||||
9/30/2018 | 9/30/2017 | 9/30/21 | 9/30/20 | |||||||||||||||||||||||||||||
Amount | Weighted Average Interest Rate (1) | Amount | Weighted Average Interest Rate (1) | Amount | Weighted Average Interest Rate (1) | Amount | Weighted Average Interest Rate (1) | |||||||||||||||||||||||||
Fixed Rate Mortgage Notes Payable | $ | 719,768,355 | 4.07 | % | $ | 598,962,567 | 4.18 | % | $ | 839,622 | 3.86 | % | $ | 807,371 | 3.98 | % | ||||||||||||||||
Debt Issuance Costs | $ | 11,715,985 | $ | 10,597,083 | $ | 12,643 | $ | 12,377 | ||||||||||||||||||||||||
Accumulated Amortization of Debt Issuance Costs | (3,493,279 | ) | (2,998,887 | ) | (5,205 | ) | (4,513 | ) | ||||||||||||||||||||||||
Unamortized Debt Issuance Costs | $ | 8,222,706 | $ | 7,598,196 | $ | 7,438 | $ | 7,864 | ||||||||||||||||||||||||
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs | $ | 711,545,649 | $ | 591,364,371 | $ | 832,184 | $ | 799,507 |
(1) | Weighted average interest rate excludes amortization of debt issuance costs. |
93 |
The following is a summary of our mortgage notes payable by property at September 30, 20182021 and 2017:2020 (in thousands):
SUMMARY OF MORTGAGE NOTES PAYABLE
Property | Fixed Rate | Maturity Date | Balance 9/30/18 | Balance 9/30/17 | ||||||||||||||
Richfield, OH (Cleveland) | (1) | 5.22 | % | 01/01/18 | $ | -0- | $ | 2,724,856 | ||||||||||
Tampa, FL (FDX) | (1) | 5.65 | % | 04/01/18 | -0- | 3,654,913 | ||||||||||||
West Chester Twp., OH (Cincinnati) | (1) | 6.80 | % | 06/01/18 | -0- | 1,820,753 | ||||||||||||
Orlando, FL | (1) | 6.56 | % | 10/01/18 | -0- | 4,098,856 | ||||||||||||
Tampa, FL (FDX Ground) | 6.00 | % | 03/01/19 | 5,144,319 | 5,910,953 | |||||||||||||
Lebanon, TN (Nashville) | 7.60 | % | 07/10/19 | 7,217,469 | 7,446,653 | |||||||||||||
Ft. Mill, SC (Charlotte, NC) | 7.00 | % | 10/10/19 | 724,766 | 1,346,845 | |||||||||||||
Denver, CO | 6.07 | % | 11/01/19 | 414,049 | 746,617 | |||||||||||||
Hanahan, SC (Charleston)(FDX Ground) | 5.54 | % | 01/21/20 | 465,749 | 773,234 | |||||||||||||
Augusta, GA (FDX Ground) | 5.54 | % | 02/01/20 | 338,789 | 562,454 | |||||||||||||
Huntsville, AL | 5.50 | % | 03/01/20 | 370,903 | 589,073 | |||||||||||||
Colorado Springs, CO | (1) | 5.41 | % | 01/01/21 | -0- | 1,043,704 | ||||||||||||
Topeka, KS | 6.50 | % | 08/10/21 | 860,364 | 1,119,836 | |||||||||||||
Streetsboro, OH (Cleveland) | 5.50 | % | 11/01/21 | 9,300,481 | 9,887,817 | |||||||||||||
Kansas City, MO | 5.18 | % | 12/01/21 | 6,633,001 | 6,799,803 | |||||||||||||
Olive Branch, MS (Memphis, TN)(Anda Pharmaceuticals, Inc.) | 4.80 | % | 04/01/22 | 7,564,186 | 8,171,480 | |||||||||||||
Waco, TX | 4.75 | % | 08/01/22 | 4,234,777 | 4,524,045 | |||||||||||||
Houston, TX | 6.88 | % | 09/10/22 | 2,148,201 | 2,619,835 | |||||||||||||
Tolleson, AZ (Phoenix) | 3.95 | % | 11/01/22 | 3,719,709 | 4,525,118 | |||||||||||||
Edwardsville, KS (Kansas City)(International Paper) | 3.45 | % | 11/01/23 | 9,189,343 | 9,931,292 | |||||||||||||
Spring, TX (Houston) | 4.01 | % | 12/01/23 | 7,924,865 | 8,537,878 | |||||||||||||
Memphis, TN | 4.50 | % | 01/01/24 | 5,061,376 | 5,882,668 | |||||||||||||
Oklahoma City, OK (FDX Ground) | 4.35 | % | 07/01/24 | 3,416,097 | 3,919,663 | |||||||||||||
Indianapolis, IN | 4.00 | % | 09/01/24 | 10,437,151 | 11,381,906 | |||||||||||||
Frankfort, KY (Lexington) | 4.84 | % | 12/15/24 | 16,639,132 | 17,560,855 | |||||||||||||
Carrollton, TX (Dallas) | 6.75 | % | 02/01/25 | 6,455,552 | 7,233,486 | |||||||||||||
Altoona, PA | (2) | 4.00 | % | 10/01/25 | 3,253,281 | 3,642,839 | ||||||||||||
Green Bay, WI | (2) | 4.00 | % | 10/01/25 | 2,640,432 | 2,956,605 | ||||||||||||
Stewartville, MN (Rochester) | (2) | 4.00 | % | 10/01/25 | 2,115,962 | 2,369,334 | ||||||||||||
Carlstadt, NJ (New York, NY) | 5.25 | % | 05/15/26 | 1,580,181 | 1,743,353 | |||||||||||||
Roanoke, VA (FDX Ground) | 3.84 | % | 07/01/26 | 4,395,246 | 4,867,194 | |||||||||||||
Livonia, MI (Detroit) | 4.45 | % | 12/01/26 | 6,294,503 | 6,912,375 | |||||||||||||
Oklahoma City, OK (Amazon) | 3.64 | % | 12/01/27 | 19,013,593 | -0- | |||||||||||||
Olive Branch, MS (Memphis, TN)(Milwaukee Tool) | 3.76 | % | 10/01/28 | 21,722,567 | 23,461,936 | |||||||||||||
Tulsa, OK | 4.58 | % | 11/01/28 | 1,685,288 | 1,812,575 | |||||||||||||
Oklahoma City, OK (Bunzl) | 4.13 | % | 07/01/29 | 5,537,962 | 5,935,346 | |||||||||||||
Lindale, TX (Tyler) | 4.57 | % | 11/01/29 | 5,638,258 | 6,016,758 | |||||||||||||
Sauget, IL (St. Louis, MO) | 4.40 | % | 11/01/29 | 8,563,797 | 9,145,097 | |||||||||||||
Jacksonville, FL (FDX Ground) | 3.93 | % | 12/01/29 | 16,243,754 | 17,370,102 | |||||||||||||
Imperial, PA (Pittsburgh) | 3.63 | % | 04/01/30 | 11,199,661 | 11,963,800 | |||||||||||||
Monroe, OH (Cincinnati) | 3.77 | % | 04/01/30 | 7,126,384 | 7,608,083 | |||||||||||||
Greenwood, IN (Indianapolis) | 3.91 | % | 06/01/30 | 20,159,025 | 21,485,141 | |||||||||||||
Ft. Worth, TX (Dallas) | 3.56 | % | 09/01/30 | 20,753,864 | 22,116,268 | |||||||||||||
Concord, NC (Charlotte) | 3.87 | % | 12/01/30 | 17,813,451 | 18,928,835 | |||||||||||||
Covington, LA (New Orleans) | 4.08 | % | 01/01/31 | 11,133,990 | 11,814,941 | |||||||||||||
Burlington, WA (Seattle/Everett) | 3.67 | % | 05/01/31 | 17,757,364 | 18,839,050 | |||||||||||||
Louisville, KY | 3.74 | % | 07/01/31 | 6,525,135 | 6,914,142 | |||||||||||||
Colorado Springs, CO | 3.90 | % | 07/01/31 | 16,651,710 | 17,632,728 | |||||||||||||
Davenport, FL (Orlando) | 3.89 | % | 09/01/31 | 23,702,918 | 25,077,642 | |||||||||||||
Olathe, KS (Kansas City) | 3.96 | % | 09/01/31 | 19,956,867 | 21,108,249 | |||||||||||||
Hamburg, NY (Buffalo) | 4.03 | % | 11/01/31 | 21,328,714 | 22,532,881 | |||||||||||||
Ft. Myers, FL (FDX Ground) | 3.97 | % | 01/01/32 | 13,280,803 | 14,021,964 | |||||||||||||
Savannah, GA | 3.53 | % | 02/01/32 | 32,215,696 | -0- | |||||||||||||
Walker, MI (Grand Rapids) | 3.86 | % | 05/01/32 | 19,468,554 | 20,530,135 | |||||||||||||
Mesquite, TX (Dallas) | 3.60 | % | 07/01/32 | 30,928,224 | 32,623,355 |
Property | Fixed Rate | Maturity Date | Balance 9/30/21 | Balance 9/30/20 | ||||||||||||
Topeka, KS | (1) | 6.50 | % | 08/10/21 | $ | 0 | $ | 288 | ||||||||
Streetsboro, OH (Cleveland) | (2) | 5.50 | % | 11/01/21 | 7,332 | 8,025 | ||||||||||
Kansas City, MO | (1) | 5.18 | % | 12/01/21 | 0 | 6,273 | ||||||||||
Olive Branch, MS (Memphis, TN)(Anda Pharmaceuticals, Inc.) | 4.80 | % | 04/01/22 | 5,558 | 6,259 | |||||||||||
Waco, TX | 4.75 | % | 08/01/22 | 3,280 | 3,613 | |||||||||||
Houston, TX | (1) | 6.88 | % | 09/10/22 | 0 | 1,102 | ||||||||||
Tolleson, AZ (Phoenix) | 3.95 | % | 11/01/22 | 1,103 | 2,010 | |||||||||||
Edwardsville, KS (Kansas City)(International Paper) | 3.45 | % | 11/01/23 | 6,804 | 7,627 | |||||||||||
Spring, TX (Houston) | 4.01 | % | 12/01/23 | 5,931 | 6,623 | |||||||||||
Memphis, TN | 4.50 | % | 01/01/24 | 2,364 | 3,304 | |||||||||||
Oklahoma City, OK (FDX Ground) | 4.35 | % | 07/01/24 | 1,767 | 2,341 | |||||||||||
Indianapolis, IN | 4.00 | % | 09/01/24 | 7,366 | 8,431 | |||||||||||
Frankfort, KY (Lexington) | 4.84 | % | 12/15/24 | 13,483 | 14,611 | |||||||||||
Carrollton, TX (Dallas) | 6.75 | % | 02/01/25 | 3,781 | 4,733 | |||||||||||
Altoona, PA | (3) | 4.00 | % | 10/01/25 | 1,987 | 2,426 | ||||||||||
Green Bay, WI | (3) | 4.00 | % | 10/01/25 | 1,613 | 1,971 | ||||||||||
Stewartville, MN (Rochester) | (3) | 4.00 | % | 10/01/25 | 1,292 | 1,578 | ||||||||||
Carlstadt, NJ (New York, NY) | (4) | 5.25 | % | 05/15/26 | 0 | 1,227 | ||||||||||
Roanoke, VA (FDX Ground) | 3.84 | % | 07/01/26 | 2,866 | 3,395 | |||||||||||
Livonia, MI (Detroit) | 4.45 | % | 12/01/26 | 4,267 | 4,973 | |||||||||||
Oklahoma City, OK (Amazon) | 3.64 | % | 12/01/27 | 16,501 | 17,369 | |||||||||||
Olive Branch, MS (Memphis, TN) (Milwaukee Tool) | 3.76 | % | 10/01/28 | 16,095 | 18,042 | |||||||||||
Tulsa, OK | 4.58 | % | 11/01/28 | 1,267 | 1,413 | |||||||||||
Oklahoma City, OK (Bunzl) | 4.13 | % | 07/01/29 | 4,243 | 4,692 | |||||||||||
Lindale, TX (Tyler) | 4.57 | % | 11/01/29 | 4,393 | 4,827 | |||||||||||
Sauget, IL (St. Louis, MO) | 4.40 | % | 11/01/29 | 6,659 | 7,322 | |||||||||||
Jacksonville, FL (FDX Ground) | 3.93 | % | 12/01/29 | 12,587 | 13,854 | |||||||||||
Lancaster (Columbus), OH | 3.47 | % | 01/01/30 | 8,311 | 9,091 | |||||||||||
Imperial, PA (Pittsburgh) | 3.63 | % | 04/01/30 | 8,734 | 9,586 | |||||||||||
Monroe, OH (Cincinnati) | (5) | 3.77 | % | 04/01/30 | 5,567 | 6,107 | ||||||||||
Monroe, OH (Cincinnati) | (5) | 3.85 | % | 04/01/30 | 5,886 | 6,453 | ||||||||||
Greenwood, IN (Indianapolis) (ULTA) | 3.91 | % | 06/01/30 | 15,855 | 17,346 | |||||||||||
Ft. Worth, TX (Dallas) | 3.56 | % | 09/01/30 | 16,364 | 17,879 | |||||||||||
Concord, NC (Charlotte) | 3.87 | % | 12/01/30 | 14,197 | 15,449 | |||||||||||
Covington, LA (New Orleans) | 4.08 | % | 01/01/31 | 8,917 | 9,686 | |||||||||||
Burlington, WA (Seattle/Everett) | 3.67 | % | 05/01/31 | 14,264 | 15,471 | |||||||||||
Louisville, KY | 3.74 | % | 07/01/31 | 5,267 | 5,702 | |||||||||||
Colorado Springs, CO | 3.90 | % | 07/01/31 | 13,469 | 14,571 | |||||||||||
Davenport, FL (Orlando) | 3.89 | % | 09/01/31 | 19,243 | 20,788 | |||||||||||
Olathe, KS (Kansas City) | 3.96 | % | 09/01/31 | 16,217 | 17,513 | |||||||||||
Hamburg, NY (Buffalo) | 4.03 | % | 11/01/31 | 17,411 | 18,770 | |||||||||||
Ft. Myers, FL | 3.97 | % | 01/01/32 | 10,873 | 11,707 | |||||||||||
Savannah, GA (Shaw) | 3.53 | % | 02/01/32 | 26,273 | 28,324 | |||||||||||
Walker, MI (Grand Rapids) | 3.86 | % | 05/01/32 | 16,027 | 17,219 | |||||||||||
Mesquite, TX (Dallas) | 3.60 | % | 07/01/32 | 25,461 | 27,350 | |||||||||||
Aiken, SC (Augusta, GA) | 4.20 | % | 07/01/32 | 12,003 | 12,861 | |||||||||||
Homestead, FL (Miami) | 3.60 | % | 07/01/32 | 19,193 | 20,616 | |||||||||||
Mobile, AL | 4.14 | % | 07/01/32 | 15,609 | 16,728 | |||||||||||
Concord, NC (Charlotte) | 3.80 | % | 09/01/32 | 20,587 | 22,067 | |||||||||||
Kenton, OH | 4.45 | % | 10/01/32 | 9,592 | 10,247 | |||||||||||
Stow, OH | 4.17 | % | 10/01/32 | 10,106 | 10,809 | |||||||||||
Charleston, SC (FDX) | 4.23 | % | 12/01/32 | 11,444 | 12,222 | |||||||||||
Daytona Beach, FL | 4.25 | % | 05/31/33 | 16,170 | 17,219 | |||||||||||
Charleston, SC (FDX Ground) | 3.82 | % | 09/01/33 | 25,171 | 26,794 |
94 |
Property | Fixed Rate | Maturity Date | Balance 9/30/18 | Balance 9/30/17 | ||||||||||
Aiken, SC (Augusta, GA) | 4.20 | % | 07/01/32 | $ | 14,471,117 | $ | 15,227,062 | |||||||
Homestead, FL (Miami) | 3.60 | % | 07/01/32 | 23,313,676 | 24,591,465 | |||||||||
Mobile, AL | 4.14 | % | 07/01/32 | 18,832,395 | -0- | |||||||||
Concord, NC (Charlotte) | 3.80 | % | 09/01/32 | 24,863,355 | 26,184,000 | |||||||||
Kenton, OH | 4.45 | % | 10/01/32 | 11,473,387 | 12,000,000 | |||||||||
Stow, OH | 4.17 | % | 10/01/32 | 12,130,343 | 12,700,000 | |||||||||
Charleston, SC (FDX) | 4.23 | % | 12/01/32 | 13,683,131 | -0- | |||||||||
Daytona Beach, FL | 4.25 | % | 05/31/33 | 19,187,819 | -0- | |||||||||
Charleston, SC (FDX Ground) | 3.82 | % | 09/01/33 | 29,860,000 | -0- | |||||||||
Braselton, GA (Atlanta) | 4.02 | % | 10/01/33 | 39,700,000 | -0- | |||||||||
Buckner, KY (Louisville) | 4.17 | % | 11/01/33 | 15,305,669 | 16,014,719 | |||||||||
Total Mortgage Notes Payable | $ | 719,768,355 | $ | 598,962,567 |
Property | Fixed Rate | Maturity Date | Balance 9/30/21 | Balance 9/30/20 | ||||||||||||
Braselton, GA (Atlanta) | 4.02 | % | 10/01/33 | $ | 33,730 | $ | 35,856 | |||||||||
Buckner, KY (Louisville) | 4.17 | % | 11/01/33 | 12,993 | 13,796 | |||||||||||
Trenton, NJ | 4.13 | % | 11/01/33 | 47,039 | 49,955 | |||||||||||
Savannah, GA (FDX Ground) | 4.40 | % | 12/01/33 | 15,091 | 16,001 | |||||||||||
Lafayette, IN | 4.25 | % | 08/01/34 | 15,234 | 16,101 | |||||||||||
Whitsett (Greensboro), NC | 3.10 | % | 06/01/35 | 28,277 | 29,902 | |||||||||||
Ogden (Salt Lake City), UT | 3.18 | % | 06/01/35 | 7,805 | 8,251 | |||||||||||
Oklahoma City, OK (Amazon) | 3.00 | % | 10/01/35 | 9,272 | 9,750 | |||||||||||
Plain City (Columbus), OH | 2.95 | % | 01/01/36 | 45,322 | 0 | |||||||||||
Greenwood (Indianapolis), IN (Amazon II) | 4.27 | % | 11/01/37 | 48,802 | 50,855 | |||||||||||
Locust Grove (Atlanta), GA | 3.25 | % | 01/01/38 | 55,307 | 0 | |||||||||||
Total Mortgage Notes Payable | $ | 839,622 | $ | 807,371 |
(1) | Loan was |
(2) | Loan was paid in full subsequent to fiscal yearend 2021 on November 1, 2021. |
(3) | One self-amortizing loan is secured by Altoona, PA, Green Bay, WI and Stewartville (Rochester), MN. |
(4) | This property was sold during fiscal 2021 and loan was paid in full at closing. |
(5) | Two self-amortizing loans secured by same property. |
Principal on the foregoing debt at September 30, 20182021 is scheduled to be paid as follows:follows (in thousands):
SCHEDULE OF MATURITIES OF LONG-TERM DEBT
Year Ending September 30, 2019 | $ | 60,151,223 | ||||||||||||
2020 | 48,605,542 | |||||||||||||
2021 | 50,098,257 | |||||||||||||
2021 | ||||||||||||||
2022 | 72,031,353 | Year Ending September 30, | 2022 | $ | 81,537 | |||||||||
2023 | 50,522,349 | 2023 | 67,234 | |||||||||||
2024 | 2024 | 80,674 | ||||||||||||
2025 | 2025 | 75,069 | ||||||||||||
2026 | 2026 | 66,263 | ||||||||||||
Thereafter | 438,359,631 | Thereafter | 468,845 | |||||||||||
$ | 719,768,355 | |||||||||||||
Total | $ | 839,622 |
The above table does not include a 15 year, fully-amortizing mortgage loan of $55,000,000 at a fixed interest rate of 4.13%, which was obtained subsequent to the 2018 fiscal yearend in connection with the purchase of a property for approximately $85,248,000.
Loans Payable:
BMO Capital Markets
On August 27, 2015, we obtained anThe $250.0 million Loans Payable represents our $75.0 million unsecured revolvingterm loan (the “Term Loan”) and $175.0 drawn down under our unsecured line of credit facility (the “Facility”“Revolver”). The Facility is syndicated with three banks led by BMO, as sole lead arrangerOn November 15, 2019, we entered into a new line of credit facility (the “New Facility”) consisting of a $225.0 million Revolver and sole book runner, Bank of Montreal as administrative agent, and includes JPMorgan Chase Bank, N.A. (J.P. Morgan) and RBC Capital Markets (RBC) as co-syndication agents. The Facility provided for up to $130,000,000a new $75.0 million Term Loan, resulting in available borrowings with a $70,000,000 accordion feature, bringing the total potential availability up to $200,000,000, subject to certain conditions. The Facility was set to mature in August 2019under both the Revolver and had a one-year extension option, at our option. On September 30, 2016, we entered intothe Term Loan of $300.0 million, which is an amendment toadditional $100.0 million over the Facility (the Amendment), pursuant to which we exercisedformer line of credit facility. In addition, the $70,000,000Revolver includes an accordion feature under the Facility, bringing the maximum availability under the Facility to $200,000,000, and amended the Facility to provide an additional $100,000,000 accordion feature, bringingthat will allow the total potential availability upunder the New Facility to $300,000,000, subjectfurther increase to certain conditions, including, without limitation, obtaining commitments from additional lenders. In addition, the Amendment extended the maturity date of the Facility from August 27, 2019 to September 30, 2020, with a one-year extension option, at our option, subject to$400.0 million, under certain conditions. The $225.0 million Revolver matures in January 2024 with two options to extend for additional six-month periods. Availability under the New Facility is limited to 60% of the value of the borrowing base properties. The value of the borrowing base properties is determined by applying a capitalization rate to the NOI generated by our unencumbered, wholly-owned industrial properties. Effective, March 22, 2018,Under the New Facility the capitalization rate applied to our NOI generated by our unencumbered, wholly-owned industrial properties was lowered from 7.0%6.5% under the former line of credit facility to 6.5%6.25%, thus increasing the value of the borrowing base properties under the terms of the agreement. BorrowingsNew Facility. In addition, the interest rate for borrowings under the Facility,Revolver was lowered by a range of 5 basis points to 35 basis points, depending on our leverage ratio, and will, at our election, either i) bear interest at LIBOR plus 135 basis points to 205 basis points, depending on our leverage ratio, or ii) bear interest at Bank of Montreal’s (BMO) prime lending rate plus 35 basis points to 105 basis points, depending on our leverage ratio. Currently, our borrowings bear interest under the Revolver at LIBOR plus 145 basis points, which results in an interest rate of 1.53%. As of the fiscal yearend and currently, we have $175.0 million drawn down under our Revolver, resulting in $50.0 million being currently available. Including the accordion feature, we have up to $150.0 million potentially available under the Revolver. As of September 30, 2021, Loans Payable represented $75.0 million outstanding under our Term Loan which matures January 2025 and $175.0 million outstanding under our Revolver which matures in January 2024. The interest rate for borrowings under the Term Loan will at our election, either i) bear interest at LIBOR plus 140130 basis points to 220200 basis points, depending on our leverage ratio, or ii) bear interest at BMO’s prime lending rate plus 4030 basis points to 120100 basis points, depending on our leverage ratio. Based on our leverage ratios as of September 30, 2018 and 2017, our borrowings boreTo reduce floating interest at LIBOR plus 170 basis points, which was atrate exposure under the Term Loan, we also entered into an interest rate of 3.90% and 2.94% as of September 30, 2018 and 2017, respectively. As of September 30, 2018 and 2017, $160,000,000 and $110,000,000, respectively, was drawn down under the Facility. Subsequentswap agreement to fiscal yearend, on October 9, 2018, we paid down $50,000,000fix LIBOR on the Facility which reduced our amount outstanding to $110,000,000.entire $75.0 million for the full duration of the Term Loan resulting in an all-in rate of 2.92%.
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Margin Loans
From time to time we use a margin loan for purchasing securities, for temporary funding of acquisitions, and for working capital purposes. This loan is due on demand and is collateralized by our securities portfolio. We must maintain a coverage ratio of approximately 50%50%. The interest rate charged on the margin loan is the bank’s margin rate and was 2.75% and 2.05% as of September 30, 2018 and 2017, respectively.is 0.75%. At September 30, 20182021 and 2017,2020, there was $26,608,676 and $10,091,417 outstanding onwere no amounts drawn down under the margin loan, respectively. Subsequent to fiscal yearend, on October 9, 2018, we paid off the margin loan.
For the three fiscal years ended September 30, 2018,2021, 2020 and 2019, amortization of financing costs included in interest expense was $1,220,983, $1,234,259$1.4 million, $1.4 million and $1,116,238,$1.3 million, respectively.
NOTE 8 - OTHER LIABILITIES
Other liabilities consist of the following as of September 30th:30, 2021 and 2020 (in thousands):
SCHEDULE OF OTHER LIABILITIES
9/30/18 | 9/30/17 | 9/30/21 | 9/30/20 | |||||||||||||
Rent paid in advance | $ | 9,400,909 | $ | 9,108,097 | $ | 11,760 | $ | 10,167 | ||||||||
Unearned reimbursement revenue | 5,814,937 | 3,996,340 | 7,218 | 6,208 | ||||||||||||
Interest Rate Swap, Market Value | 2,230 | 4,368 | ||||||||||||||
Tenant security deposits | 715,177 | 582,170 | 597 | 1,326 | ||||||||||||
Other | 495,599 | 578,911 | ||||||||||||||
Deferred Straight Line Rent | 771 | 972 | ||||||||||||||
Legal & Other Liabilities | 8,158 | 632 | ||||||||||||||
Total | $ | 16,426,622 | $ | 14,265,518 | $ | 30,734 | $ | 23,673 |
At our Annual Meeting held on May 18, 2017, our common shareholders approved our Amended and Restated 2007 Incentive Award Plan (the Plan) which extended the term of our 2007 Incentive Award Plan for an additional 10 years, until March 13, 2027, added 1,600,000 million shares of common stock to the share reserve, expanded the types of awards available for grant under the Plan and made other improvements to the 2007 Plan.
The Compensation Committee, in its capacity as Plan Administrator, shall determine, among other things: the recipients of awards; the type and number of awards participants will receive; the terms, conditions and forms of the awards; the times and conditions subject to which awards may be exercised or become vested, deliverable or exercisable, or as to which any restrictions may apply or lapse; and may amend or modify the terms and conditions of an award, except that repricing of options or Stock Appreciation Rights (SAR) is not permitted without shareholder approval.
$100,000$ in value on the date of grant, and the grant date value of any special or one-time award upon election or appointment to the Board of Directors may not exceed $200,000.$ . Regular annual awards granted to non-employee directors as compensation for services as non-employee directors during any fiscal year may not exceed
Awards granted pursuant to the Plan generally may not vest until the first anniversary of the date the award was granted, provided, however, that up to 5% % of the Common Shares available under the Plan may be awarded to any one or more Eligible Individuals without the minimum vesting period.
If an award made under the Plan is forfeited, expires or is converted into shares of another entity in connection with a recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares or other similar event, or the award is settled in cash, the shares associated with the forfeited, expired, converted or settled award will become available for additional awards under the Plan.
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The term of any stock option or SAR generally may not be more than 100% % of the fair market value of a common share at the date of grant. years from the date of grant. The exercise price per common share under the Plan generally may not be below
We account for our stock options and restricted stock in accordance with ASC 718-10, Compensation-Stock Compensation. ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period).
Stock Options
During fiscal 2018,2021, one employee was granted options to purchase shares. During fiscal 2017, eleven employees were granted options to purchase 280,000 shares. During fiscal 2016,2020, one employee was granted options to purchase shares. During fiscal 2019, thirteen employees were granted options to purchase shares. The fair value of these options that were issued during the fiscal years 2018, 20172021, 2020 and 20162019 was $119,600, $416,400,$ ,000, $ ,000, and $48,100.$ ,000. The value of these options was determined based on the assumptions below and is being amortized over a vesting period. For the fiscal years ended September 30, 2018, 20172021, 2020 and 2016,2019, amounts charged to compensation expense related to stock options totaled $167,799, $350,364$ ,000, $ ,000 and $51,334,$ ,000, respectively. The remaining unamortized stock option expense was $29,900$24,000 as of September 30, 20182021 which will be expensed in fiscal 2019.2022.
SCHEDULE OF STOCK OPTIONS, VALUATION ASSUMPTIONS
2018 | 2017 | 2016 | ||||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||||||
Dividend yield | 3.82 | % | 4.44 | % | 6.17 | % | 4.37 | % | 4.67 | % | 5.03 | % | ||||||||||||
Expected volatility | 16.45 | % | 18.84 | % | 20.20 | % | 20.17 | % | 18.40 | % | 17.17 | % | ||||||||||||
Risk-free interest rate | 2.37 | % | 2.26 | % | 2.09 | % | 0.80 | % | 1.76 | % | 2.88 | % | ||||||||||||
Expected lives (years) | 8 | 8 | 8 | 8 | 8 | 8 | ||||||||||||||||||
Estimated forfeitures | -0- | -0- | -0- | 0 | 0 | 0 |
A summary of the status of our stock option plan as of September 30, 2018, 20172021, 2020 and 20162019 is as follows:follows (shares in thousands):
SUMMARY OF STATUS OF COMPANY'S STOCK OPTION PLAN
2018 | 2017 | 2016 | 2021 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||
2018 Shares | Weighted Average Exercise Price | 2017 Shares | Weighted Average Exercise Price | 2016 Shares | Weighted Average Exercise Price | 2021 Shares | Weighted Average Exercise Price | 2020 Shares | Weighted Average Exercise Price | 2019 Shares | Weighted Average Exercise Price | |||||||||||||||||||||||||||||||||||||
Outstanding at beginning of year | 670,000 | $ | 11.75 | 455,000 | $ | 9.46 | 635,000 | $ | 8.68 | 950 | $ | 13.17 | 1,080 | $ | 12.95 | 695 | $ | 12.17 | ||||||||||||||||||||||||||||||
Granted | 65,000 | 17.80 | 280,000 | 14.43 | 65,000 | 10.37 | 65 | 16.46 | 65 | 14.55 | 450 | 13.53 | ||||||||||||||||||||||||||||||||||||
Exercised | (40,000 | ) | 14.24 | (65,000 | ) | 7.22 | (245,000 | ) | 7.69 | (189 | ) | 12.57 | (95 | ) | 10.69 | (65 | ) | 8.72 | ||||||||||||||||||||||||||||||
Expired/Forfeited | -0- | -0- | -0- | -0- | -0- | -0- | 0 | 0 | (100 | ) | 13.97 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Outstanding at end of year | 695,000 | 12.17 | 670,000 | 11.75 | 455,000 | 9.46 | 826 | 13.57 | 950 | 13.17 | 1,080 | 12.95 | ||||||||||||||||||||||||||||||||||||
Exercisable at end of year | 630,000 | 390,000 | 390,000 | 761 | 885 | 630 | ||||||||||||||||||||||||||||||||||||||||||
Weighted-average fair value of options granted during the year | $ | 1.84 | $ | 1.49 | $ | 0.74 | ||||||||||||||||||||||||||||||||||||||||||
Weighted average fair value of | ||||||||||||||||||||||||||||||||||||||||||||||||
options granted during the year | $ | 1.49 | $ | 1.24 | $ | 1.17 |
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SUMMARY OF STOCK OPTION OUTSTANDING
Date of Grant | Number of Grants | Number of Shares | Option Price | Expiration Date | Number of Grants | Number of Shares (in thousands) | Option Price | Expiration Date | |||||||||||||||||||||
01/03/11 | 1 | 65,000 | $ | 8.72 | 01/03/19 | ||||||||||||||||||||||||
01/03/12 | 1 | 65,000 | 9.33 | 01/03/20 | |||||||||||||||||||||||||
01/03/13 | 1 | 65,000 | 10.46 | 01/03/21 | |||||||||||||||||||||||||
01/03/14 | 1 | 65,000 | 8.94 | 01/03/22 | 1 | 65 | $ | 8.94 | |||||||||||||||||||||
01/05/15 | 1 | 65,000 | 11.16 | 01/05/23 | 1 | 65 | $ | 11.16 | |||||||||||||||||||||
01/05/16 | 1 | 65,000 | 10.37 | 01/05/24 | 1 | 65 | $ | 10.37 | |||||||||||||||||||||
12/09/16 | 8 | 175,000 | 14.24 | 12/09/24 | 6 | 113 | $ | 14.24 | |||||||||||||||||||||
01/04/17 | 1 | 65,000 | 15.04 | 01/04/25 | 1 | 65 | $ | 15.04 | |||||||||||||||||||||
01/03/18 | 1 | 65,000 | 17.80 | 01/03/26 | 1 | 65 | $ | 17.80 | |||||||||||||||||||||
8 | 193 | $ | 13.64 | ||||||||||||||||||||||||||
1 | 65 | $ | 12.86 | ||||||||||||||||||||||||||
1 | 65 | $ | 14.55 | ||||||||||||||||||||||||||
1 | 65 | $ | 16.46 | ||||||||||||||||||||||||||
695,000 | 826 |
The aggregate intrinsic value of options outstanding as of September 30, 2018, 20172021, 2020 and 20162019 was $3,230,300, $2,974,400$ million, $ million and $2,189,850,$ million, respectively. The intrinsic value of options exercised in fiscal years 2018, 20172021, 2020 and 20162019 was $141,304, $585,650,$ ,000, $ ,000, and $884,350,$ ,000, respectively. The weighted-averageweighted average remaining contractual term of the above options was 4.3, 5.1 , and 4.2 years as of September 30, 2018, 20172021, 2020 and 2016,2019, respectively.
Unrestricted Stock
Effective September 12, 2017, a portion of our quarterly directors’ fee was paid with our unrestricted common stock. During fiscal 2018, 3,6702021, unrestricted shares of common stock were granted with a weighted average fair value on the grant date of $16.10$ per share. During fiscal 2017, 8362020, unrestricted shares of common stock were granted with a weighted average fair value on the grant date of $15.92$ per share. During fiscal 2019, unrestricted shares of common stock were granted with a weighted average fair value on the grant date of $ per share.
Restricted Stock
In October 2017,During fiscal 2021 and 2020, there were 12,500 shares of restricted stock to one participant under our Plan. In September 2017, we awarded 11,000 shares of restricted stock to eleven participants under our Plan. In September 2016, we awarded 40,000 shares of restricted stock to one participant under our Plan. The grant date fair value of restricted stock grants awarded to participants was $205,875, $175,120$0, $0 and $545,600$386,000 in fiscal 2018, 20172021, 2020 and 2016,2019, respectively. These grants vest in equal installments over . As of September 30, 2018,2021, there remained a total of $484,543$ ,000 of unrecognized restricted stock compensation related to outstanding non-vested restricted stock grants awarded under the Plan and outstanding at that date. Restricted stock compensation is expected to be expensed over a remaining weighted average period of 3.1 years. For the fiscal years ended September 30, 2018, 20172021, 2020 and 2016,2019, amounts charged to compensation expense related to restricted stock grants totaled $207,008, $261,033$147,000, $235,000 and $875,131,$258,000, respectively. shares of restricted stock awarded under our Plan. During fiscal 2019, we awarded
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SUMMARY OF NONVESTED RESTRICTED STOCK AWARDS
2018 | 2017 | 2016 | 2021 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||
2018 Shares | Weighted-Average Grant Date Fair Value | 2017 Shares | Weighted-Average Grant Date Fair Value | 2016 Shares | Weighted-Average Grant Date Fair Value | 2021 Shares | Weighted Average Grant Date Fair Value | 2020 Shares | Weighted Average Grant Date Fair Value | 2019 Shares | Weighted Average Grant Date Fair Value | |||||||||||||||||||||||||||||||||||||
Non-vested at beginning of year | 89,714 | $ | 12.15 | 117,897 | $ | 11.35 | 123,496 | $ | 10.08 | 46 | $ | 15.02 | 77 | $ | 13.94 | 78 | $ | 13.18 | ||||||||||||||||||||||||||||||
Granted | 12,500 | 16.47 | 11,000 | 15.92 | 40,000 | 13.64 | 0 | 0 | 0 | 0 | 25 | 15.45 | ||||||||||||||||||||||||||||||||||||
Dividend Reinvested Shares | 4,406 | 15.42 | 5,103 | 13.99 | 6,771 | 11.08 | 1 | 18.14 | 4 | 12.89 | 5 | 13.11 | ||||||||||||||||||||||||||||||||||||
Vested | (29,084 | ) | (16.99 | ) | (44,286 | ) | (15.74 | ) | (49,136 | ) | (10.06 | ) | (21 | ) | (17.01 | ) | (35 | ) | (14.37 | ) | (31 | ) | (14.33 | ) | ||||||||||||||||||||||||
Forfeited | -0- | -0- | -0- | -0- | (3,234 | ) | (11.38 | ) | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||
Non-vested at end of year | 77,536 | $ | 13.18 | 89,714 | $ | 12.15 | 117,897 | $ | 11.35 | 26 | $ | 15.54 | 46 | $ | 15.02 | 77 | $ | 13.94 |
As of September 30, 2018,2021, there were 1,671,872 million shares available for grant under the Plan.
NOTE 10 - INCOME FROM LEASES
We derive income primarily from operating leases on our commercial properties. At September 30, 2021, we held investments in 122 properties totaling 24.9 million square feet with an overall occupancy rate of 99.7%. In general, these leases are written for periods up to 10 years or more with various provisions for renewal. These leases generally contain clauses for reimbursement (or direct payment) of real estate taxes, maintenance, insurance and certain other operating expenses of the properties. As of September 30, 2018,2021, we had a weighted average lease maturity of 8.17.0 years and our average annualized rent per occupied square foot was $6.01.$6.61. Our weighted average lease expiration has been 7.0 years or greater for over seven consecutive years. Our overall occupancy rate has been 98.9% or above for over six consecutive years. Approximate minimum base rents due under non-cancellable leases as of September 30, 20182021 are scheduled as follows:follows (in thousands):
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES
Fiscal Year | Amount | Amount | ||||||
2019 | $ | 122,292,000 | ||||||
2020 | 120,007,000 | |||||||
2021 | 118,094,000 | |||||||
2022 | 111,474,000 | $ | 157,646 | |||||
2023 | 106,679,000 | 152,056 | ||||||
2024 | 140,646 | |||||||
2025 | 129,437 | |||||||
2026 | 118,354 | |||||||
thereafter | 499,883,000 | 581,268 | ||||||
Total | $ | 1,078,429,000 | $ | 1,279,407 |
NOTE 11 - RELATED PARTY TRANSACTIONS
FiveFour of our 13 directors are also directors and shareholders of UMH. We holdAs of September 30, 2021, we held common and preferred stock of UMH in our securities portfolio. See Note 6 for current holdings. During fiscal 2018,2021, we made total purchases of 59,905 common shares of UMH for a total cost of $828,787,$1.0 million, or a weighted average cost of $13.84$ per share, which were purchased through UMH’s Dividend Reinvestment and Stock Purchase Plan. We owned a total of million shares of UMH’s common stock as of September 30, 2021 at a total cost of $14.9 million and a fair value of $31.6 million representing 2.8% of the outstanding common shares of UMH. The unrealized gain on our investment in UMH’s common stock as of September 30, 2021 was $16.7 million. During fiscal 2018,2021, UMH made total purchases of 101,304 of our common shares through our DRIP for a total cost of $1,566,624,$205,000, or a weighted average cost of $15.46$ per share.
As of September 30, 2018,2021, we had fourteen14 full-time employees and one part-time employee.employees. Our Chairman of the Board is also the Chairman of the Board of UMH. Other than our Chairman of the Board, we do not share any employees with UMH.
Effective January 12, 2015, we entered into a seven-year lease agreement to occupy 5,680 square feet for our current corporate office space. Rent for our current corporate office space is at an annual rate of $99,400 or $17.50 per square foot for years one through five and an annual rate of $100,820 or $17.75 per square foot for years six and seven. We are also responsible for our proportionate share of real estate taxes and common area maintenance. Mr. Eugene W. Landy, the Founder and Chairman of the Board, owns a 24% interest in the entity that is the landlord of the property where our corporate office space is located. We believe that the aforesaid rent is no more than what we would pay for comparable space elsewhere.
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Daniel D. Cronheim is one of our directors and is also an Executive Vice President of David Cronheim Company (Cronheim) and Cronheim Management Services, Inc. (CMSI). Daniel Cronheim received $73,323, $75,880 and $49,500 for director’s fees in fiscal 2018, 2017 and 2016, respectively. We have not paid any fees to The David Cronheim Mortgage Corporation, an affiliated company of CMSI, over the last three fiscal years.
NOTE 12 - TAXES
Income Tax
We have elected to be taxed as a REIT under the applicable provisions of the Code under Sections 856 to 860 and the comparable New Jersey Statutes. Under such provisions, we will not be taxed on that portion of our taxable income distributed currently to shareholders, provided that at least 90%90% of our taxable income is distributed. As we have and intend to continue to distribute all of our income, currently no provision has been made for income taxes. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income taxes at regular corporate rates and may not be able to qualify as a REIT for four subsequent taxable years. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and to federal income and excise taxes on our undistributed taxable income. In addition, taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to federal, state, and local income taxes.
Federal Excise Tax
We do not have a Federal excise tax liability for the calendar years 2018, 20172021, 2020 and 2016,2019, since we intend to or have distributed all of our annual Federal taxable net income.
Reconciliation Between U.S. GAAP Net Income and Taxable Income
The following table reconciles Net Income (Loss) Attributable to common shares to taxable income for the years ended September 30, 2018, 20172021, 2020 and 2016:2019 (in thousands):
SCHEDULE OF NET INCOME AND TAXABLE INCOME
2018 Estimated (unaudited) | 2017 Actual | 2016 Actual | 2021 Estimated (unaudited) | 2020 Actual | 2019 Actual | |||||||||||||||||||
Net income attributable to common shareholders | $ | 38,815,344 | $ | 22,942,234 | $ | 20,531,888 | ||||||||||||||||||
Net Income (Loss) Attributable to Common Shareholders | $ | 44,764 | $ | (48,617 | ) | $ | 11,026 | |||||||||||||||||
Book / tax difference on gains realized from capital transactions | (7,596,653 | ) | (2,311,714 | ) | (4,398,599 | ) | 5,237 | 0 | 0 | |||||||||||||||
Stock compensation expense | 433,895 | 624,706 | 926,465 | 287 | 452 | 784 | ||||||||||||||||||
Deferred compensation | -0- | -0- | -0- | |||||||||||||||||||||
Unrealized Holding (Gain)/Loss Arising During the Period | (50,239 | ) | 77,380 | 24,680 | ||||||||||||||||||||
Other book / tax differences, net | (1,038,925 | ) | (1,596,068 | ) | 1,298,104 | 31,753 | (3,149 | ) | (4,441 | ) | ||||||||||||||
Taxable income before adjustments | 30,613,661 | 19,659,158 | 18,357,858 | 31,802 | 26,066 | 32,049 | ||||||||||||||||||
Add: capital gains | 7,996,653 | 566,903 | 3,643,569 | |||||||||||||||||||||
Add: Capital gains (losses) | 0 | 0 | 0 | |||||||||||||||||||||
Estimated taxable income subject to 90% dividend requirement | $ | 38,610,314 | $ | 20,226,061 | $ | 22,001,427 | $ | 31,802 | $ | 26,066 | $ | 32,049 |
Reconciliation Between Cash Dividends Paid and Dividends Paid Deduction
The following table reconciles cash dividends paid with the dividends paid deduction for the years ended September 30, 2018, 20172021, 2020 and 2016:2019 (in thousands):
SCHEDULE OF CASH DIVIDENDS PAID AND DIVIDENDS PAID DEDUCTION
2018 | 2021 | 2020 | 2019 | |||||||||||||||||||||
Estimated (unaudited) | 2017 Actual | 2016 Actual | Estimated (unaudited) | 2020 Actual | 2019 Actual | |||||||||||||||||||
Cash dividends paid | $ | 53,586,063 | $ | 46,289,248 | $ | 42,034,183 | $ | 69,754 | $ | 66,438 | $ | 63,742 | ||||||||||||
Less: Portion designated capital gains distribution | (7,996,653 | ) | (566,903 | ) | (3,643,569 | ) | ||||||||||||||||||
Less: Return of capital | (14,975,748 | ) | (7,361,734 | ) | (7,828,595 | ) | (4,533 | ) | (14,533 | ) | (51,406 | ) | ||||||||||||
Estimated dividends paid deduction | $ | 30,613,662 | $ | 38,360,611 | $ | 30,562,019 | $ | 65,221 | $ | 51,905 | $ | 12,336 |
NOTE 13 - SHAREHOLDERS’ EQUITY
Our authorized stock as of September 30, 2021 consisted of 6.125% Series C Preferred Stock, of which million shares were issued and outstanding, and .0 million authorized shares of Excess Stock, $ par value per share, of which were issued or outstanding. .0 million shares of common stock, of which million shares were issued and outstanding, million authorized shares of
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NOTE 13 - SHAREHOLDERS’ EQUITY
Common Stock
We have implemented a Dividend Reinvestment and Stock Purchase Plan (the DRIP) effective December 15, 1987. Under the terms of the DRIP, as subsequently amended, shareholders who participate may reinvest all or part of their dividends in additional shares at a discounted price (approximately 95% % of market value) directly from us, from authorized but unissued shares of our common stock. Shareholders may also purchase additional shares through the DRIP by making optional cash payments monthly. In January 2021, when our Board of Directors unanimously decided to explore strategic alternatives to maximize shareholder value, the Board also determined to temporarily suspend our DRIP program during this process. Because the exploration of strategic alternative process is still ongoing, the DRIP program remains suspended.
SCHEDULE OF SHARES ISSUED IN CONNECTION WITH DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
2018 | 2017 | 2016 | 2021 | 2020 | 2019 | |||||||||||||||||||
Amounts received | $ | 90,028,789 | $ | 91,931,831 | $ | 72,175,797 | ||||||||||||||||||
Amounts received (1) | $ | 1,361 | $ | 26,411 | $ | 73,965 | ||||||||||||||||||
Less: Dividend reinvestments | 12,928,356 | 10,125,894 | 8,369,146 | 1,041 | 7,596 | 16,886 | ||||||||||||||||||
Amounts received, net | $ | 77,100,433 | $ | 81,805,937 | $ | 63,806,651 | $ | 320 | $ | 18,815 | $ | 57,079 | ||||||||||||
Number of Shares Issued | 5,816,443 | 6,632,713 | 6,515,750 | 88 | 1,956 | 5,601 |
(1) | Optional cash payments must be not less than $500 per payment nor more than $1,000 unless a request for a waiver has been accepted by us. We have not granted any waivers since March 2020 and the DRIP program has been temporarily suspended since January 2021. |
SUMMARY OF CASH DISTRIBUTIONS TO COMMON SHAREHOLDERS
2018 | 2017 | 2016 | 2021 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||
Quarter Ended | Amount | Per Share | Amount | Per Share | Amount | Per Share | Amount | Per Share | Amount | Per Share | Amount | Per Share | ||||||||||||||||||||||||||||||||||||
December 31 | $ | 13,016,721 | $ | 0.17 | $ | 11,184,399 | $ | 0.16 | $ | 10,083,160 | $ | 0.16 | $ | 16,672 | $ | 0.17 | $ | 16,486 | $ | 0.17 | $ | 15,570 | $ | 0.17 | ||||||||||||||||||||||||
March 31 | 13,302,878 | 0.17 | 11,428,917 | 0.16 | 10,384,295 | 0.16 | 17,694 | 0.18 | 16,654 | 0.17 | 15,825 | 0.17 | ||||||||||||||||||||||||||||||||||||
June 30 | 13,522,569 | 0.17 | 11,697,727 | 0.16 | 10,647,332 | 0.16 | 17,694 | 0.18 | 16,641 | 0.17 | 16,064 | 0.17 | ||||||||||||||||||||||||||||||||||||
September 30 | 13,743,895 | 0.17 | 11,978,205 | 0.16 | 10,919,396 | 0.16 | 17,694 | 0.18 | 16,657 | 0.17 | 16,283 | 0.17 | ||||||||||||||||||||||||||||||||||||
$ | 53,586,063 | $ | 0.68 | $ | 46,289,248 | $ | 0.64 | $ | 42,034,183 | $ | 0.64 | $ | 69,754 | $ | 0.71 | $ | 66,438 | $ | 0.68 | $ | 63,742 | $ | 0.68 |
On October 1, 2015,January 14, 2021, our Board of Directors approved a 6.7%5.9% increase in our quarterly common stock dividend, raising it to $0.16$ per share from $0.15$ per share. This representedshare representing an annualized dividend rate of $0.64 per share. On October 2, 2017, our Board of Directors approved a 6.3% increase in our quarterly common stock dividend, raising it to $0.17 per share from $0.16$ per share. This represents an annualizedincrease was the third dividend rate of $0.68 per share. These two dividend raises representincrease in the past five years, representing a total increase of 13%20%. We have maintained or increased our common stock cash dividend for 2730 consecutive years. We are one of the few REITs that maintained our dividend throughout the Global Financial Crisis. On October 1, 2018,2021, our Board of Directors approveddeclared a cash dividend of $0.17$ per share to be paid on December 17, 2018,15, 2021 to common shareholders of record atas of the close of business on November 15, 2018. This represents2021.
On February 6, 2020, we entered into an annualized dividend rate of $0.68 per share.
Subsequent to fiscal year end, in October 2018,Equity Distribution Agreement (Common Stock ATM Program) with BMO Capital Markets Corp., B. Riley Securities, Inc. (formerly B. Riley FBR, Inc.), D.A. Davidson & Co., Janney Montgomery Scott LLC, J.P. Morgan Securities LLC and RBC Capital Markets, LLC (together the “Distribution Agents”) under which we completed a public offering of 9,200,000may offer and sell shares of our Common Stock (including the underwriters’ option to purchase 1,200,000 additional shares) at a price of $15.00 per share, before underwriting discounts. We received net proceeds from the offering, after deducting underwriting discounts and all other transaction costs, of approximately $132,339,000.
Preferred Stock
7.625% Series A Cumulative Redeemable Preferred Stock
On September 14, 2016, we announced that we intended to redeem all 2,139,750 issued and outstanding shares of our 7.625% Series A Cumulative Redeemable Preferred Stock, $0.01common stock, $ par value per share, (7.625% Series A Preferred Stock). We redeemed allhaving an aggregate sales price of up to $150.0 million from time to time through the Distribution Agents. Sales of the 7.625% Series A Preferredshares of Common Stock on October 14, 2016 at a redemption price of $25.00 per share, plus all dividends accrued and unpaid to and includingunder the redemption date,Agreement, if any, will be in an amount equal to $0.23299 per share. As of September 30, 2016,“at the outstanding 7.625% Series A Preferredmarket offerings.” We implemented the Common Stock was reclassified out of stockholder’s equity and was reflected as a liability at redemption value and we recognized a deemed dividend of $2,942,149 on the Consolidated Statement of IncomeATM program for the fiscal year ended September 30, 2016, which representsflexibility that it provides to opportunistically access the difference between redemption valuecapital markets and carrying value net of original deferred issuance costs.to best time our equity capital needs as we close on acquisitions. To date, we have not raised any equity though our Common Stock Equity Program and it has since expired.
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Prior to its redemption, the annual dividendRepurchase of the 7.625% Series A PreferredCommon Stock was $1.90625 per share, or 7.625%, of the $25.00 per share liquidation value and was payable quarterly in arrears on March 15, June 15, September 15, and December 15.
OurOn January 16, 2019, our Board of Directors has authorized a $40.0 million increase to our previously announced $10.0 million Common Stock Repurchase Program (the “Program”), bringing the total available under the Program to $50.0 million. The timing, manner, price and weamount of any repurchase will be determined by us at our discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. The Program does not have paida termination date and may be suspended or discontinued at our discretion without prior notice. On September 14, 2021, our Board of Directors reaffirmed the following dividends on the 7.625% Series A Preferred Stock for the fiscal years ended September 30, 2017 and 2016:
Declaration Date | Record Date | Payment Date |
Dividend | Dividend per Share | ||||||||||
(1) | 9/14/16 | 10/14/16 | 10/14/16 | $ | 498,540 | $ | 0.23299 |
Declaration Date | Record Date | Payment Date |
Dividend | Dividend per Share | ||||||||
10/1/15 | 11/16/15 | 12/15/15 | $ | 1,019,725 | $ | 0.4765625 | ||||||
1/19/16 | 2/16/16 | 3/15/16 | 1,019,726 | 0.4765625 | ||||||||
4/5/16 | 5/16/16 | 6/15/16 | 1,019,725 | 0.4765625 | ||||||||
7/1/16 | 8/15/16 | 9/15/16 | 1,019,726 | 0.4765625 | ||||||||
$ | 4,078,902 | $ | 1.9062500 |
7.875% Series B Cumulative Redeemable Preferred Stock
On May 5, 2017, we announced that we intended to redeem all 2,300,000 issued and outstanding shares of our 7.875% Series B Cumulative Redeemable Preferred Stock, $0.01 par value per share (7.875% Series B Preferred Stock). We redeemed all ofcommon stock. Under the outstandingProgram, during fiscal 2020, we repurchased shares of the 7.875% Series B Preferred Stock on June 7, 2017,our common stock for $4.3 million at a redemptionan average price of $25.00$ per share, totaling $57,500,000, plus accumulatedshare. These were the only repurchases made under the Program to date and unpaid dividends forwe may elect not to repurchase any additional common stock in the period from June 1, 2017 up to and not including,future. The remaining maximum dollar value that may be purchased under the redemption date, in an amount equal to $0.0328125, totaling $75,469, for a total cash paymentRepurchase Program as of $25.0328125 per share, totaling $57,575,469. We recognized a deemed dividend of $2,467,165 on the Consolidated Statement of Income for the fiscal year ended September 30, 2017, which represents the difference between redemption value and carrying value net of original deferred issuance costs.2021 is $45.7 million.
Prior to its redemption, the annual dividend of the 7.875% Series B Preferred Stock was $1.96875 per share, or 7.875%, of the $25.00 per share liquidation value and was payable quarterly in arrears on March 15, June 15, September 15, and December 15.
Our Board of Directors has authorized and we have paid the following dividends on the Series B Preferred Stock for the fiscal years ended September 30, 2017 and 2016:
Declaration Date | Record Date | Payment Date |
Dividend | Dividend per Share | ||||||||||
10/3/16 | 11/15/16 | 12/15/16 | $ | 1,132,032 | $ | 0.4921875 | ||||||||
1/17/17 | 2/15/17 | 3/15/17 | 1,132,033 | 0.4921875 | ||||||||||
4/4/17 | 5/15/17 | 6/15/17 | 1,132,032 | 0.4921875 | ||||||||||
(1) | 5/5/17 | 6/7/17 | 6/7/17 | 75,470 | 0.0328125 | |||||||||
$ | 3,471,567 | $ | 1.5093750 |
Declaration Date | Record Date | Payment Date | Dividend | Dividend per Share | ||||||||
10/1/15 | 11/16/15 | 12/15/15 | $ | 1,132,032 | $ | 0.4921875 | ||||||
1/19/16 | 2/16/16 | 3/15/16 | 1,132,033 | 0.4921875 | ||||||||
4/5/16 | 5/16/16 | 6/15/16 | 1,132,032 | 0.4921875 | ||||||||
7/1/16 | 8/15/16 | 9/15/16 | 1,132,033 | 0.4921875 | ||||||||
$ | 4,528,130 | $ | 1.9687500 |
6.125% Series C Cumulative Redeemable Preferred Stock
OnAs of September 13, 2016, we issued 5,400,00030, 2021, .0 million shares of our 6.125% Series C Preferred Stock were outstanding representing a liquidation preference of $549.6 million.
At-the-Market Sales Agreement Program for our 6.125% Series C Cumulative Redeemable Preferred Stock $0.01 par value per share (6.125% Series C Preferred Stock), at an offering price of $25.00 per share in an underwritten public offering. We received net proceeds from the offering, after deducting the underwriting discount and other estimated offering expenses, of approximately $130,543,000. On September 15, 2016, we used $45,000,000 of such net proceeds from the offering to reduce the amounts outstanding under our Facility and on October 14, 2016, and as discussed above, we used $53,493,750 of such net proceeds from the offering to redeem all of the 2,139,750 issued and outstanding shares of our 7.625% Series A Preferred Stock. In addition, on October 14, 2016, we used $498,540 of such net proceeds from the offering to pay all dividends, accrued and unpaid, up to and including the redemption date of the 7.625% Series A Preferred Stock.
On March 9, 2017, we issued an additional 3,000,000 shares of our 6.125% Series C Preferred Stock, liquidation preference of $25.00 per share, at a public offering price of $24.50 per share, for gross proceeds of $73,500,000 before deducting the underwriting discount and offering expenses. Net proceeds from the offering, after deducting underwriting discounts and other offering expenses were approximately $71,003,000. As discussed above, we used the net proceeds from this offering to redeem all of the outstanding shares of our 7.875% Series B Preferred Stock. In addition, we used $75,469 of such net proceeds from the offering to pay all dividends, accrued and unpaid, up to and not including the redemption date of the 7.875% Series B Preferred Stock.
On June 29, 2017, we entered into a Preferred Stock At-The-Market Sales Agreement Program with B. Riley FBR, Inc., or B. Riley (formerly FBR Capital Markets & Co.), that provided for the offer and sale of shares of our 6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 par value per share, with a liquidation preference of $25.00 per share, or our 6.125% Series C preferred stock, having an aggregate sales price of up to $100,000,000. $100.0 million.
On August 2, 2018, we replaced this program with a new Preferred Stock At-The-Market Sales Agreement Program (Preferred Stock ATM Program) that provides for the offer and sale from time to time of $125,000,000$125.0 million of our 6.125%6.125% Series C preferred stock. Preferred Stock, representing an additional $96.5 million, with $28.5 million being carried over from the Preferred Stock At-The-Market Sales Agreement Program entered into on June 29, 2017.
On December 4, 2019, we replaced the Preferred Stock At-The-Market Sales Agreement Program entered into on August 2, 2018 with another Preferred Stock At-The-Market Sales Agreement Program that provides for the offer and sale from time to time of $125.0 million of our 6.125% Series C Preferred Stock, representing an additional $101.0 million, with $24.0 million being carried over from the Preferred Stock At-The-Market Sales Agreement Program entered into on August 2, 2018.
On November 25, 2020, we entered into a Preferred Stock At-The-Market Sales Agreement Program (Preferred Stock ATM Program) with B. Riley FBR., or B. Riley, providing for the offer and sale from time to time of up to $150.0 million of our 6.125% Series C Preferred Stock, which replaced a previous Preferred Stock ATM Program entered into on December 4, 2019 (which itself had replaced an earlier Preferred Stock ATM Program).
Sales of shares of our 6.125%6.125% Series C preferred stockPreferred Stock under theour Preferred Stock ATM Program are in “at the market offerings” as defined in Rule 415 under the Securities Act, including, without limitation, sales made directly on or through the NYSE, or on any other existing trading market for the 6.125% Series C preferred stockPreferred Stock, or to or through a market maker, or any other method permitted by law, including, without limitation, negotiated transactions and block trades. We began selling shares through the first of these programs on July 3, 2017. Since inception through September 30, 2018,2021, we sold 3,088,001 million shares of our 6.125% Series C Preferred Stock under these programs at a weighted average price of $25.06$
As of September 30, 2018, 11,488,001 shares of the 6.125% Series C Preferred Stock were issued and outstanding.
We have been and we intendpursuant to continue to use the proceeds raised through the Preferred Stock ATM Program to purchase properties and fund expansions of our existing properties in the ordinary course of business and for general corporate purposes.since December 31, 2020. Our Preferred Stock ATM Program has since expired.
Our Board of Directors has authorized and we have paid the following dividends on our 6.125% Series C Preferred Stock for the fiscal years ended September 30, 20182021, 2020 and 2017:2019 (in thousands except per share amounts):
Declaration Date | Record Date | Payment Date |
Dividend | Dividend per Share | ||||||||
10/2/17 | 11/15/17 | 12/15/17 | $ | 4,080,685 | $ | 0.3828125 | ||||||
1/16/18 | 2/15/18 | 3/15/18 | 4,220,657 | 0.3828125 | ||||||||
4/2/18 | 5/15/18 | 6/15/18 | 4,247,507 | 0.3828125 | ||||||||
7/2/18 | 8/15/18 | 9/17/18 | 4,327,683 | 0.3828125 | ||||||||
$ | 16,876,532 | $ | 1.53125 |
Declaration Date | Record Date | Payment Date |
Dividend | Dividend per Share | ||||||||
10/3/16 | 11/15/16 | 12/15/16 | $ | 1,791,563 | $ | 0.3317708 | ||||||
1/17/17 | 2/15/17 | 3/15/17 | 2,067,190 | 0.3828125 | ||||||||
4/4/17 | 5/15/17 | 6/15/17 | 3,215,629 | 0.3828125 | ||||||||
7/3/17 | 8/15/17 | 9/15/17 | 3,455,985 | 0.3828125 | ||||||||
$ | 10,530,367 | $ | 1.4802083 |
SCHEDULE OF DIVIDEND DECLARED AND PAID ON SERIES C PREFERRED STOCK
Declaration Date | Record Date | Payment Date | Dividend | Dividend per Share | ||||||||
10/1/20 | 11/16/20 | 12/15/20 | $ | 7,775 | $ | 0.3828125 | ||||||
1/14/21 | 2/16/21 | 3/15/21 | 8,416 | 0.3828125 | ||||||||
4/1/21 | 5/17/21 | 6/15/21 | 8,416 | 0.3828125 | ||||||||
7/1/21 | 8/16/21 | 8/31/21 | 8,416 | 0.3828125 | ||||||||
$ | 33,023 | $ | 1.53125 |
Declaration Date | Record Date | Payment Date | Dividend | Dividend per Share | ||||||||
10/1/19 | 11/15/19 | 12/16/19 | $ | 5,873 | $ | 0.3828125 | ||||||
1/16/20 | 2/18/20 | 3/16/20 | 6,572 | 0.3828125 | ||||||||
4/1/20 | 5/15/20 | 6/15/20 | 6,583 | 0.3828125 | ||||||||
7/1/20 | 8/17/20 | 9/15/20 | 6,811 | 0.3828125 | ||||||||
$ | 25,839 | $ | 1.53125 |
Declaration Date | Record Date | Payment Date | Dividend | Dividend per Share | ||||||||
10/1/18 | 11/15/18 | 12/17/18 | $ | 4,415 | $ | 0.3828125 | ||||||
1/16/19 | 2/15/19 | 3/15/19 | 4,424 | 0.3828125 | ||||||||
4/2/19 | 5/15/19 | 6/17/19 | 4,681 | 0.3828125 | ||||||||
7/1/19 | 8/15/19 | 9/16/19 | 4,945 | 0.3828125 | ||||||||
$ | 18,465 | $ | 1.53125 |
The annual dividend of the 6.125% Series C Preferred Stock is $1.53125$ per share, or 6.125% of the $25.00$25.00 per share liquidation value and is payable quarterly in arrears on March 15, June 15, September 15, and December 15. The 6.125% Series C Preferred Stock has no maturity and will remain outstanding indefinitely unless redeemed or otherwise repurchased. Except in limited circumstances relating to our qualification as a REIT, and as described below,Currently, the 6.125% Series C Preferred Stock is not redeemable prior to September 15, 2021. On and after September 15, 2021, at any time and, from time to time, the 6.125% Series C Preferred Stock will be redeemable in whole, or in part, at our option, at a cash redemption price of $25.00$ per share, plus all accrued and unpaid dividends (whether or not declared) to the date of redemption.
Upon the occurrence of a Delisting Event, as defined in the Articles Supplementary (Series C Articles Supplementary) classifying and designating the 6.125% Series C Preferred Stock, we may, at our option and subject to certain conditions, redeem the 6.125% Series C Preferred Stock, in whole or in part, within 90 days after the Delisting Event, for a cash redemption price per share of 6.125% Series C Preferred Stock equal to $25.00 plus any accumulated and unpaid dividends thereon (whether or not declared), to, but not including, the redemption date.date.
Upon the occurrence of a Change of Control, as defined in the Series C Articles Supplementary, we may, at our option and subject to certain conditions, redeem the 6.125% Series C Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control occurred, for a cash redemption price per share of 6.125% Series C Preferred Stock equal to $25.00 plus any accumulated and unpaid dividends thereon (whether or not declared) to, but not including, the redemption date.date.
On October 1, 2018,2021, our Board of Directors declared a quarterly dividend for the period September 1, 20182021 through November 30, 2018,2021, of $0.3828125$ per share to be paid December 17, 201815, 2021 to shareholders of record as of the close of business on November 15, 2018.2021.
Repurchase of Stock
On January 16, 2018, the Board of Directors reaffirmed our Share Repurchase Program (Repurchase Program) that authorizes us to purchase up to $10,000,000 in the aggregate of our common stock. The Repurchase Program was originally created on March 3, 2009 and is intended to be implemented through purchases made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or block trades, or by any combination of such methods, in accordance with applicable insider trading and other securities laws and regulations. The size, scope and timing of any purchases will be based on business, market and other conditions and factors, including price, regulatory and contractual requirements or consents, and capital availability. The Repurchase Program does not require us to acquire any particular amount of common stock, and the program may be suspended, modified or discontinued at any time at our discretion without prior notice. We did not reacquire any of our shares of Common Stock during the fiscal year ended September 30, 2018, nor do we possess any reacquired shares of Common Stock as of September 30, 2018. The maximum dollar value that may be purchased under the Repurchase Program as of September 30, 2018 is $10,000,000.
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NOTE 14 - FAIR VALUE MEASUREMENTS
We follow ASC 825, Financial Instruments, for financial assets and liabilities recognized at fair value on a recurring basis. We measure certain financial assets and liabilities at fair value on a recurring basis, including securities available for sale.sale and an interest rate swap agreement. Our financial assets consist mainly of marketable REIT securities. The fair value of these certain financial assets was determined using the following inputs at September 30, 20182021 and 2017:2020 (in thousands):
SUMMARY OF FAIR VALUE OF FINANCIAL ASSETS
Fair Value Measurements at Reporting Date Using | Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||||||||
September 30, 2018: | ||||||||||||||||||||||||||||||||
September 30, 2021: | ||||||||||||||||||||||||||||||||
Securities available for sale | $ | 154,920,545 | $ | 154,920,545 | $ | -0- | $ | -0- | $ | 143,505 | $ | 143,505 | $ | 0 | $ | 0 | ||||||||||||||||
September 30, 2017: | ||||||||||||||||||||||||||||||||
Interest Rate Swap | (2,230 | ) | 0 | (2,230 | ) | 0 | ||||||||||||||||||||||||||
Total | $ | 141,275 | $ | 143,505 | $ | (2,230 | ) | $ | 0 | |||||||||||||||||||||||
September 30, 2020: | ||||||||||||||||||||||||||||||||
Securities available for sale | $ | 123,764,770 | $ | 123,764,770 | $ | -0- | $ | -0- | $ | 108,832 | $ | 108,832 | $ | 0 | $ | 0 | ||||||||||||||||
Interest Rate Swap | (4,368 | ) | 0 | (4,368 | ) | 0 | ||||||||||||||||||||||||||
Total | $ | 104,464 | $ | 108,832 | $ | (4,368 | ) | $ | 0 |
In addition to our investments in Securities Available for Sale at Fair Value and our interest rate swap agreement, we are required to disclose certain information about fair values of our other financial instruments. Estimates of fair value are made at a specific point in time based upon, where available, relevant market prices and information about the financial instrument. Such estimates do not include any premium or discount that could result from offering for sale at one time our entire holdings of a particular financial instrument. For a portion of our other financial instruments, no quoted market value exists. Therefore, estimates of fair value are necessarily based on a number of significant assumptions (many of which involve events outside of our control). Such assumptions include assessments of current economic conditions, perceived risks associated with these financial instruments and their counterparties; future expected loss experience and other factors. Given the uncertainties surrounding these assumptions, the reported fair values represent estimates only, and therefore cannot be compared to the historical accounting model. The use of different assumptions or methodologies is likely to result in significantly different fair value estimates.
The fair value of Cash and Cash Equivalents approximates their current carrying amounts since all such items are short-term in nature. The fair value of variable rate Loans Payable approximates their current carrying amounts since such amounts payable are at approximately a weighted-averageweighted average current market rate of interest. The estimated fair value of fixed rate mortgage notes payable is based on discounting the future cash flows at a year-end risk adjusted borrowing rate currently available to us for issuance of debt with similar terms and remaining maturities. These fair value measurements fall within level 2 of the fair value hierarchy. At September 30, 2018,2021, the fixed rate Mortgage Notes Payable fair value (estimated based upon expected cash outflows discounted at current market rates) amounted to $706,745,000$885.9 million and the carrying value amounted to $719,768,355.$839.6 million. When we acquired a property, prior to April 1, 2017, that was accounted for as a business combination, it was required towe allocate purchase price based upon relative fair value of all of the assets and liabilities, including intangible assets and liabilities, relating to the properties acquired lease (See Note 3). Those fair value measurements were estimated based on independent third-party appraisals and fell within level 3 of the fair value hierarchy.
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NOTE 15 - CASH FLOW
During fiscal years 2018, 20172021, 2020 and 2016,2019, we paid cash for interest of $31,335,763, $24,290,811$36.4 million, $35.0 million and $21,967,741,$35.9 million, respectively.
During fiscal years 2018, 20172021, 2020 and 2016,2019, we had $12,928,356, $10,125,894$1.0 million, $7.6 million and $8,369,146,$16.9 million, respectively, of dividends which were reinvested that required no cash transfers.
NOTE 16 – CONTINGENCIES, COMMITMENTS AND LEGAL MATTERS
From time to time, we can be subject to claims and litigation in the ordinary course of business. We do not believe that any such claim or litigation will have a material adverse effect on our consolidated balance sheet or results of operations.
In addition to the $30.2 million property purchased subsequent to our fiscal yearend,in October 2021, as described below in Note 17,18, we have entered into agreements to purchase twothree, new build-to-suit, industrial buildings that are currently being developed in Alabama, Georgia and North Carolina, consisting of approximately 398,000Texas, totaling 1.1 million square feet, withfeet. These future acquisitions have net-leased terms ranging from 10 to 15 years with a weighted average lease term of 13.4 12.6 years. The total purchase price for these three properties is approximately $68,747,000$126.8 million. All three properties are leased to companies, or subsidiaries of companies, that are considered Investment Grade by S&P Global Ratings (www.standardandpoors.com) and bothby Moody’s (www.moodys.com). Two of these three properties, consisting of an aggregate of 563,000 square feet, or 52% of the total leasable area, are leased to FedEx Ground Package System, Inc. Subject to satisfactory due diligence and other customary closing conditions and requirements, we anticipate closing all three of these transactions during fiscal 2022.
We have several FedEx Ground parking expansion projects in progress with more under discussion. Currently there are nine parking expansion projects underway, which we expect to cost approximately $42.6 million. These parking expansion projects will enable us to capture additional rent while lengthening the first quarterterms of fiscalthese leases. We are also in discussions to expand the parking at eight additional locations bringing the total recently completed and likely future parking lot expansion projects to 18 currently.
Our headquarters is located within the Bell Works complex in Holmdel, NJ and comprises 13,000 square feet of office space and is leased for 10.3 years through December 2029 with two, five-year extension options at fair market rent, as defined in the lease agreement. Initial annual rent when the lease commenced in September 2019 was at a rate of $410,000 or $31.00 per square foot, with 2% annual escalations. The base rent includes our proportionate share of real estate taxes and fiscal 2020.common area maintenance and we are responsible for increases in real estate taxes and common area maintenance above our 2019 base year actual amounts. In addition, we received four months of free rent and a tenant improvement allowance of $48.00 per square foot.
We and the members of our Board of Directors are defendants in a class action lawsuit that was commenced in the Circuit Court for Baltimore City, Maryland in August 2021, prior to termination of our merger agreement with EQC, and which currently remains pending. The lawsuit alleges that our directors violated their legal duties in connection with onethe proposed EQC merger and seeks injunctive relief and damages. We believe that the claims asserted in this lawsuit are without merit and that in any event the claims are now moot in light of these properties,the termination of the merger agreement. We intend to seek to have this lawsuit dismissed. However, litigation is inherently uncertain and there can be no assurance we will be successful in obtaining a dismissal. Four other lawsuits that had been brought with respect to the proposed merger with EQC after the transaction was announced have since been voluntarily dismissed by the plaintiffs in light of the termination of the EQC merger agreement.
In January 2021, we commenced legal proceedings in the Superior Court of New Jersey, Chancery Division, Monmouth County, against our former general counsel, Allison Nagelberg, and Blackwells alleging that Ms. Nagelberg was in violation of her obligations owed to us as our former general counsel as a result of, among other things, having agreed to be a nominee of Blackwells for election to our Board of Directors at our 2021 annual meeting. The complaint also alleged that Blackwells wrongfully induced Ms. Nagelberg’s wrongful actions. Ms. Nagelberg filed counterclaims against us seeking indemnification and advancement of expenses pursuant to the terms of her agreements with us and our charter and bylaws. Subsequent to September 30, 2021, we entered into a commitment to obtain a 15 year, fully-amortizing mortgage loan of $17,500,000Release and Settlement Agreement with a fixed interest rate of 4.40%.Blackwells and Ms. Nagelberg resolving the claims asserted in these proceedings and other matters, as described in Note 18.
We currently have one 154,800 square foot property expansion in progress at our property located in Monroe, OH which is expected to be completed in fiscal year 2019 for a total project cost of approximately $9,072,000. The expansion will result in a new 15 year lease which will extend the prior lease expiration date from February 2030 to January 2034. In addition, the expansion will result in an increase in initial annual rent effective from the date of completion by approximately $862,000 from approximately $961,000, or $4.14 per square foot, to approximately $1,823,000, or $4.71 per square foot. In addition, the annual rent will increase 2% per annum.
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NOTE 17 – TERMINATED MERGER AGREEMENT WITH EQUITY COMMONWEALTH, REVIEW OF STRATEGIC ALTERNATIVES AND RELATED MATTERS
On May 4, 2021, following a comprehensive review and analysis by our Board of Directors of our strategic alternatives, which included consideration of proposals from several third parties that expressed interest in acquiring us, we entered into an Agreement and Plan of Merger (the “EQC Merger Agreement��) with Equity Commonwealth (“EQC”) and EQC Maple Industrial LLC, a wholly-owned subsidiary of EQC, which provided that, on the terms and subject to the conditions set forth in the EQC Merger Agreement, we would merge with and into EQC Industrial LLC and become a wholly owned subsidiary of EQC. The terms of the EQC Merger Agreement as originally executed on May 4, 2021 provided that, upon consummation of the merger, our common stockholders would receive 0.67 EQC common shares for each outstanding share of our common stock. On August 15, 2021, the EQC Merger Agreement was amended (the “Amended EQC Merger Agreement”) to provide that, upon consummation of the merger, our common stockholders would have the right to elect to receive, for each common share, either $ in cash or 0.713 EQC common shares, subject to certain caps and prorations set forth in the Amended EQC Merger Agreement. Both the original EQC Merger Agreement and the Amended EQC Merger Agreement provided that the proposed merger would be subject to customary closing conditions, including, among others, approval of the proposed merger by the holders of at least two-thirds of our outstanding common shares, as required by Maryland law and our charter.
On August 31, 2021, we held a special meeting of common stockholders to vote on the proposed merger with EQC, and at the special meeting the proposed merger did not receive approval by the requisite two-thirds of the outstanding shares of our common stock. Following the special meeting, EQC notified us on August 31, 2021 that EQC was terminating the Amended EQC Merger Agreement as a result of our failure to obtain the required stockholder approval. As required by the Merger Agreement, we subsequently reimbursed EQC for approximately $10.0 million of expenses incurred by EQC in connection with the proposed merger.
Pending litigation relating to the now terminated merger agreement with EQC is described in Note 16 and under Part I, Item 3 – Legal Proceedings.
Following termination of the Amended EQC Merger Agreement, on September 13, 2021, we announced that our Board of Directors would be re-initiating its exploration of strategic alternatives and expected to consider a wide range of potential strategic and financial alternatives, including a potential sale or merger, joint ventures and changes in our capital structure, in an expeditious process. This re-instituted strategic alternatives review process resulted in our execution of a Merger Agreement with Industrial Logistics Properties Trust on November 5, 2021, as described in Note 18.
105 |
NOTE 18 – SUBSEQUENT EVENTS
Material subsequent events have been evaluated and are disclosed herein.
Subsequent to fiscal yearend, inOn October 2018, we completed1, 2021, our Board of Directors declared a public offeringdividend of 9,200,000 shares of our Common Stock (including the underwriters’ option to purchase 1,200,000 additional shares) at a price of $15.00 $per share before underwriting discounts. We received net proceeds fromto be paid to common shareholders of record as of the offering, after deducting underwriting discounts and all other transaction costs,close of approximately $132,339,000.business on . In addition, on October 1, 2021, our Board of Directors declared a dividend of $per share to be paid to the % Series C Preferred shareholders of record as of the close of business on .
Subsequent to fiscal yearend, on October 19, 2018,27, 2021, we purchased a newly constructed 347,145291,000 square foot industrial building, situated on 62.046.0 acres, located in Trenton, NJ.the Birmingham, AL MSA. The building is 100%100% net-leased to FedEx Ground Package System, Inc. for 15 years through June 2032.July 2036. The purchase price was $85,248,352.$30.2 million. We obtained a mortgage loan commitment for a 15 year, fully-amortizing mortgage loan of $55,000,000$19.3 million at a fixed interest rate of 4.13%.2.40%, which has not yet closed. Annual rental revenue over the remaining term of the lease averages approximately $5,328,000.$1.7 million.
The industrial property purchased thus far during fiscal 2019 increased our current total leasable square feet to approximately 21,521,000.
Subsequent to fiscal yearend, on October 9, 2018,November 1, 2021, we paid down $50,000,000fully prepaid a $7.3 million mortgage loan for our property located in Streetsboro (Cleveland), OH. The loan had an interest rate of 5.5%.
On November 5, 2021, we entered into a definitive merger agreement with Industrial Logistics Properties Trust, a Maryland real estate investment trust (“ILPT”), under which, on the Facility which reducedterms and subject to the conditions set forth in the merger agreement, ILPT agreed to acquire us in an all-cash transaction, with our common stockholders receiving $ in cash for each outstanding share of our common stock. ILPT’s acquisition of us is subject to obtaining the requisite approval of our common stockholders and the satisfaction of other customary closing conditions. Upon closing of the merger with ILPT, holders of our outstanding 6.125% Series C Cumulative Redeemable Preferred Stock (“Series C Preferred Stock”) will receive the amount outstanding to $110,000,000.of $ per share plus any accrued and unpaid dividends.
SubsequentOn November 4, 2021, we entered into a Release and Settlement Agreement with our former general counsel, Allison Nagelberg, and Blackwells Capital LLC (“Blackwells”) resolving legal proceedings that we had commenced against Ms. Nagelberg and Blackwells in the Superior Court of New Jersey relating to, fiscal yearend, on October 9, 2018,among other things, Ms. Nagelberg having been named as a nominee of Blackwells for election to our Board of Directors at our 2021 annual meeting, and also resolving Ms. Nagelberg’s counterclaim against us seeking indemnification and advancement of expenses. In connection with the settlement, the parties exchanged mutual releases, whereby, among other things, Blackwells agreed to release claims, including those it had previously demanded that we paid offassert against the margin loan.members of our Board for alleged breach of their legal duties relating to the Board’s rejection of an unsolicited acquisition offer that we received from Blackwells in December 2020 and subsequent actions taken by the Board in connection with its review of strategic alternatives earlier this year.
Simultaneous with the Release and Settlement Agreement, we and Blackwells entered into a Cooperation Agreement that, among other things, resolved a potential proxy contest to elect directors at the 2021 Annual Meeting. Under the Cooperation Agreement, Blackwells also agreed, among other things, to withdraw its slate of proposed nominees and various shareholder proposals for consideration at the 2021 Annual Meeting and committed to vote all its shares of our common stock at the 2021 Annual Meeting in favor of all of the Board’s director nominees and in support of all Board-recommended proposals, including voting in favor of the Merger Agreement with ILPT. Blackwells also agreed to comply with certain additional standstill, voting and affirmative solicitation commitments and terms.
The estimated costs associated with the Release and Settlement Agreement and the Cooperation Agreement and the related litigation and potential litigation have been reflected in the accompanying Consolidated Financial Statements.
NOTE 1819 – SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
The following is the Unaudited Selected Quarterly Financial Data:
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
THREE MONTHS ENDED (in thousands)
SCHEDULE OF SELECTED QUARTERLY FINANCIAL DATA
FISCAL 2021 | 12/31/20 | 3/31/21 | 6/30/21 | 9/30/21 | ||||||||||||
Rental and Reimbursement Revenue | $ | 43,583 | $ | 46,365 | $ | 45,993 | $ | 46,815 | ||||||||
Total Expenses | 22,159 | 25,620 | 32,040 | 49,300 | ||||||||||||
Unrealized Holding Gains (Losses) Arising During the Periods | 19,721 | 19,186 | 16,471 | (5,139 | ) | |||||||||||
Other Income (Expense) | 12,169 | 13,634 | 14,648 | (13,286 | ) | |||||||||||
Net Income (Loss) Attributable to Shareholders | 33,916 | 34,329 | 25,709 | (15,771 | ) | |||||||||||
Net Income (Loss) Attributable to Shareholders per diluted share | $ | 0.34 | $ | 0.35 | $ | 0.26 | $ | (0.16 | ) | |||||||
Net Income (Loss) Attributable to Common Shareholders | 25,746 | 25,913 | 17,292 | (24,187 | ) | |||||||||||
Net Income (Loss) Attributable to Common Shareholders per diluted share | $ | 0.26 | $ | 0.26 | $ | 0.17 | $ | (0.25 | ) |
FISCAL 2018 | 12/31/17 | 3/31/18 | 6/30/18 | 9/30/18 | ||||||||||||
Rental and Reimbursement Revenue | $ | 32,741,822 | $ | 33,621,508 | $ | 36,197,825 | $ | 36,600,694 | ||||||||
Lease Termination Income | 210,261 | -0- | -0- | -0- | ||||||||||||
Total Expenses | 16,267,991 | 16,920,664 | 19,073,092 | 19,471,976 | ||||||||||||
Other Income (Expense) | (4,441,577 | ) | (5,055,841 | ) | (4,651,340 | ) | (4,969,095 | ) | ||||||||
Income from Continuing Operations | 12,242,515 | 11,645,003 | 12,473,393 | 12,159,623 | ||||||||||||
Income from Continuing Operations per diluted share | $ | 0.16 | $ | 0.15 | $ | 0.16 | $ | 0.15 | ||||||||
Gain on Sale of Real Estate Investment | 5,387,886 | -0- | 2,097,380 | -0- | ||||||||||||
Net Income | 17,630,401 | 11,645,003 | 14,570,773 | 12,159,623 | ||||||||||||
Net Income per diluted share | $ | 0.23 | $ | 0.15 | $ | 0.18 | $ | 0.15 | ||||||||
Net Income Attributable to Common Shareholders | 13,313,455 | 7,396,784 | 10,322,744 | 7,782,361 | ||||||||||||
Net Income Attributable to Common Shareholders per diluted share | $ | 0.17 | $ | 0.10 | $ | 0.13 | $ | 0.10 | ||||||||
FISCAL 2017 | 12/31/16 | 3/31/17 | 6/30/17 | 9/30/17 | ||||||||||||
Rental and Reimbursement Revenue | $ | 27,891,442 | $ | 28,018,022 | $ | 29,318,927 | $ | 31,156,914 | ||||||||
Total Expenses | 13,972,561 | 14,495,329 | 14,840,339 | 16,294,148 | ||||||||||||
Other Income (Expense) | (4,064,960 | ) | (5,098,082 | ) | (2,748,225 | ) | (4,600,576 | ) | ||||||||
Income from Continuing Operations | 9,853,921 | 8,424,611 | 11,730,363 | 10,262,190 | ||||||||||||
Income from Continuing Operations per diluted share | $ | 0.14 | $ | 0.12 | $ | 0.16 | $ | 0.14 | ||||||||
Net Income | 9,853,921 | 8,424,611 | 11,730,363 | 10,262,190 | ||||||||||||
Net Income per diluted share | $ | 0.14 | $ | 0.12 | $ | 0.16 | $ | 0.14 | ||||||||
Net Income Attributable to Common Shareholders | 6,156,161 | 4,842,575 | 5,217,411 | 6,726,087 | ||||||||||||
Net Income Attributable to Common Shareholders per diluted share | $ | 0.09 | $ | 0.07 | $ | 0.07 | $ | 0.09 |
FISCAL 2020 | 12/31/19 | 3/31/20 | 6/30/20 | 9/30/20 | ||||||||||||
Rental and Reimbursement Revenue | $ | 41,700 | $ | 41,707 | $ | 41,775 | $ | 42,635 | ||||||||
Total Expenses | 22,428 | 21,264 | 21,459 | 21,529 | ||||||||||||
Unrealized Holding Gains (Losses) Arising During the Periods | (3,635 | ) | (83,075 | ) | 19,610 | (10,280 | ) | |||||||||
Other Income (Expense) | (9,606 | ) | (88,721 | ) | 12,979 | (17,963 | ) | |||||||||
Net Income (Loss) Attributable to Shareholders | 9,625 | (68,314 | ) | 33,458 | 3,088 | |||||||||||
Net Income (Loss) Attributable to Shareholders per diluted share | $ | 0.10 | $ | (0.70 | ) | $ | 0.34 | $ | 0.03 | |||||||
Net Income (Loss) Attributable to Common Shareholders | 3,528 | (75,078 | ) | 26,850 | (3,917 | ) | ||||||||||
Net Income (Loss) Attributable to Common Shareholders per diluted share | $ | 0.04 | $ | (0.77 | ) | $ | 0.27 | $ | (0.04 | ) |
106 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
REAL ESTATE AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 20182021
(in thousands)
Column A | Column B | Column C | Column D | |||||||||||||
Capitalization | ||||||||||||||||
Buildings and | Subsequent to | |||||||||||||||
Description | Encumbrances | Land | Improvements | Acquisition | ||||||||||||
Industrial Buildings | ||||||||||||||||
Monaca (Pittsburgh), PA | $ | -0- | $ | 401,716 | $ | 878,081 | $ | 6,630,869 | ||||||||
Ridgeland (Jackson), MS | -0- | 218,000 | 1,233,500 | 433,754 | ||||||||||||
Urbandale (Des Moines), IA | -0- | 310,000 | 1,758,000 | 455,644 | ||||||||||||
Richland (Jackson), MS | -0- | 211,000 | 1,195,000 | 494,691 | ||||||||||||
O’Fallon (St. Louis), MO | -0- | 264,000 | 3,302,000 | 679,913 | ||||||||||||
Fayetteville, NC | -0- | 172,000 | 4,467,885 | 811,744 | ||||||||||||
Schaumburg (Chicago), IL | -0- | 1,039,800 | 3,694,320 | 443,820 | ||||||||||||
Burr Ridge (Chicago), IL | -0- | 270,000 | 1,236,599 | 186,302 | ||||||||||||
Romulus (Detroit), MI | -0- | 531,000 | 3,653,883 | 547,788 | ||||||||||||
Liberty (Kansas City), MO | -0- | 723,000 | 6,498,324 | 176,557 | ||||||||||||
Omaha, NE | -0- | 1,170,000 | 4,425,500 | 349,191 | ||||||||||||
Charlottesville, VA | -0- | 1,170,000 | 2,845,000 | 440,702 | ||||||||||||
Jacksonville, FL (FDX) | -0- | 1,165,000 | 4,668,080 | 563,878 | ||||||||||||
West Chester Twp. (Cincinnati), OH | -0- | 695,000 | 3,342,000 | 1,696,686 | ||||||||||||
Mechanicsville (Richmond), VA | -0- | 1,160,000 | 6,413,305 | 219,090 | ||||||||||||
St. Joseph, MO | -0- | 800,000 | 11,753,964 | 809,684 | ||||||||||||
Newington (Hartford), CT | -0- | 410,000 | 2,961,000 | 123,108 | ||||||||||||
Cudahy (Milwaukee), WI | -0- | 980,000 | 5,050,997 | 3,735,364 | ||||||||||||
Beltsville (Washington, DC), MD | -0- | 3,200,000 | 5,958,773 | 5,353,582 | ||||||||||||
Carlstadt (New York, NY), NJ | 1,580,181 | 1,194,000 | 3,645,501 | 102,901 | ||||||||||||
Granite City (St. Louis, MO), IL | -0- | 340,000 | 12,046,675 | 311,173 | ||||||||||||
Winston-Salem, NC | -0- | 980,000 | 5,610,000 | 656,326 | ||||||||||||
Elgin (Chicago), IL | -0- | 1,280,000 | 5,529,488 | 167,954 | ||||||||||||
Cheektowaga (Buffalo), NY | -0- | 4,796,765 | 3,883,971 | 2,280,087 | ||||||||||||
Tolleson (Phoenix), AZ | 3,719,709 | 1,316,075 | 13,329,000 | 2,179,151 | ||||||||||||
Edwardsville (Kansas City), KS (Carlisle Tire) | -0- | 1,185,000 | 5,815,148 | 232,838 | ||||||||||||
Wheeling (Chicago), IL | -0- | 5,112,120 | 9,186,606 | 4,683,748 | ||||||||||||
Richmond, VA | -0- | 446,000 | 3,910,500 | 411,809 | ||||||||||||
Tampa, FL (FDX Ground) | 5,144,319 | 5,000,000 | 12,660,003 | 2,041,572 | ||||||||||||
Montgomery (Chicago), IL | -0- | 2,000,000 | 9,225,683 | 77,634 | ||||||||||||
Denver, CO | 414,049 | 1,150,000 | 3,890,300 | 1,313,751 | ||||||||||||
Hanahan (Charleston), SC (SAIC) | -0- | 1,129,000 | 11,831,321 | 449,781 | ||||||||||||
Hanahan (Charleston), SC (FDX Ground) | 465,749 | 930,000 | 3,426,362 | 3,258,291 | ||||||||||||
Augusta, GA (FDX Ground) | 338,789 | 614,406 | 3,026,409 | 1,722,490 | ||||||||||||
Tampa, FL (Tampa Bay Grand Prix) | -0- | 1,867,000 | 3,684,794 | 126,188 | ||||||||||||
Huntsville, AL | 370,903 | 748,115 | 2,724,418 | 3,189,278 | ||||||||||||
Augusta, GA (FDX) | -0- | 380,000 | 1,400,943 | 196,836 | ||||||||||||
Lakeland, FL | -0- | 261,000 | 1,621,163 | 161,063 | ||||||||||||
El Paso, TX | -0- | 3,225,195 | 4,514,427 | 4,691,570 | ||||||||||||
Richfield (Cleveland), OH | -0- | 2,676,848 | 7,197,945 | 6,572,385 | ||||||||||||
Tampa, FL (FDX) | -0- | 2,830,000 | 4,704,531 | 322,589 | ||||||||||||
Griffin (Atlanta), GA | -0- | 760,000 | 13,692,115 | 481,568 | ||||||||||||
Roanoke, VA (CHEP USA) | -0- | 1,853,000 | 4,817,298 | 793,374 | ||||||||||||
Orion, MI | -0- | 4,649,971 | 13,053,289 | 5,186,864 | ||||||||||||
Chattanooga, TN | -0- | 300,000 | 4,464,711 | 373,829 | ||||||||||||
Bedford Heights (Cleveland), OH | -0- | 990,000 | 4,893,912 | 1,035,924 | ||||||||||||
Punta Gorda, FL | -0- | -0- | 4,104,915 | 28,595 | ||||||||||||
Cocoa, FL | -0- | 1,881,316 | 8,623,564 | 3,622,569 | ||||||||||||
Orlando, FL | -0- | 2,200,000 | 6,133,800 | 440,724 | ||||||||||||
Topeka, KS | 860,364 | -0- | 3,679,843 | -0- | ||||||||||||
Memphis, TN | 5,061,376 | 1,234,987 | 13,380,000 | -0- | ||||||||||||
Houston, TX | 2,148,201 | 1,661,120 | 6,320,000 | 182,158 | ||||||||||||
Carrollton (Dallas), TX | 6,455,552 | 1,500,000 | 16,240,000 | 79,203 | ||||||||||||
Ft. Mill (Charlotte, NC), SC | 724,766 | 1,746,822 | 10,045,000 | 5,282,214 | ||||||||||||
Lebanon (Nashville), TN | 7,217,469 | 2,230,000 | 11,985,126 | -0- | ||||||||||||
Rockford, IL (Sherwin-Williams Co.) | -0- | 1,100,000 | 4,440,000 | 11,227 | ||||||||||||
Edinburg, TX | -0- | 1,000,000 | 6,414,000 | 4,625,014 |
Column A | Column B | Column C | Column D | |||||||||||||
Capitalization | ||||||||||||||||
Buildings and | Subsequent to | |||||||||||||||
Description | Encumbrances | Land | Improvements | Acquisition | ||||||||||||
Industrial Buildings | ||||||||||||||||
Monaca (Pittsburgh), PA | $ | 0 | $ | 402 | $ | 878 | $ | 6,684 | ||||||||
Ridgeland (Jackson), MS | 0 | 218 | 1,234 | 1,504 | ||||||||||||
Urbandale (Des Moines), IA | 0 | 310 | 1,758 | 476 | ||||||||||||
Richland (Jackson), MS | 0 | 211 | 1,195 | 495 | ||||||||||||
O’Fallon (St. Louis), MO | 0 | 264 | 3,302 | 684 | ||||||||||||
Fayetteville, NC | 0 | 172 | 4,468 | 818 | ||||||||||||
Schaumburg (Chicago), IL | 0 | 1,040 | 3,694 | 713 | ||||||||||||
Burr Ridge (Chicago), IL | 0 | 270 | 1,237 | 378 | ||||||||||||
Romulus (Detroit), MI | 0 | 531 | 3,654 | 764 | ||||||||||||
Liberty (Kansas City), MO | 0 | 724 | 6,498 | 577 | ||||||||||||
Omaha, NE | 0 | 1,170 | 4,426 | 368 | ||||||||||||
Charlottesville, VA | 0 | 1,170 | 2,845 | 447 | ||||||||||||
Jacksonville, FL (FDX) | 0 | 1,165 | 4,668 | 751 | ||||||||||||
West Chester Twp. (Cincinnati), OH | 0 | 695 | 3,342 | 1,697 | ||||||||||||
Mechanicsville (Richmond), VA | 0 | 1,160 | 6,413 | 263 | ||||||||||||
St. Joseph, MO | 0 | 800 | 11,754 | 951 | ||||||||||||
Newington (Hartford), CT | 0 | 410 | 2,961 | 155 | ||||||||||||
Cudahy (Milwaukee), WI | 0 | 980 | 5,051 | 3,784 | ||||||||||||
Beltsville (Washington, DC), MD | 0 | 3,200 | 5,959 | 5,562 | ||||||||||||
Granite City (St. Louis, MO), IL | 0 | 340 | 12,047 | 371 | ||||||||||||
Winston-Salem, NC | 0 | 980 | 5,610 | 837 | ||||||||||||
Elgin (Chicago), IL | 0 | 1,280 | 5,529 | 373 | ||||||||||||
Cheektowaga (Buffalo), NY | 0 | 4,797 | 3,884 | 2,280 | ||||||||||||
Tolleson (Phoenix), AZ | 1,103 | 1,316 | 13,329 | 2,179 | ||||||||||||
Edwardsville (Kansas City), KS (Carlstar) | 0 | 1,185 | 5,815 | 283 | ||||||||||||
Wheeling (Chicago), IL | 0 | 5,112 | 9,187 | 5,326 | ||||||||||||
Richmond, VA | 0 | 446 | 3,911 | 740 | ||||||||||||
Tampa, FL (FDX Ground) | 0 | 5,000 | 12,660 | 2,085 | ||||||||||||
Montgomery (Chicago), IL | 0 | 2,000 | 9,226 | 77 | ||||||||||||
Denver, CO | 0 | 1,150 | 3,890 | 1,334 | ||||||||||||
Hanahan (Charleston), SC (SAIC) | 0 | 1,129 | 11,831 | 1,503 | ||||||||||||
Hanahan (Charleston), SC (Amazon) | 0 | 930 | 3,426 | 4,950 | ||||||||||||
Augusta, GA (FDX Ground) | 0 | 614 | 3,026 | 1,723 | ||||||||||||
Tampa, FL (Tampa Bay Grand Prix) | 0 | 1,867 | 3,685 | 126 | ||||||||||||
Huntsville, AL | 0 | 748 | 2,724 | 3,190 | ||||||||||||
Augusta, GA (FDX) | 0 | 380 | 1,401 | 212 | ||||||||||||
Lakeland, FL | 0 | 261 | 1,621 | 161 | ||||||||||||
El Paso, TX | 0 | 3,225 | 4,514 | 4,692 | ||||||||||||
Richfield (Cleveland), OH | 0 | 2,677 | 7,198 | 6,762 | ||||||||||||
Tampa, FL (FDX) | 0 | 2,830 | 4,705 | 813 | ||||||||||||
Griffin (Atlanta), GA | 0 | 760 | 13,692 | 630 | ||||||||||||
Roanoke, VA (CHEP USA) | 0 | 1,853 | 4,816 | 803 | ||||||||||||
Orion, MI | 0 | 4,650 | 13,053 | 5,453 | ||||||||||||
Chattanooga, TN | 0 | 300 | 4,465 | 604 | ||||||||||||
Bedford Heights (Cleveland), OH | 0 | 990 | 4,894 | 1,420 | ||||||||||||
Punta Gorda, FL | 0 | 0 | 4,105 | 29 | ||||||||||||
Cocoa, FL | 0 | 1,881 | 8,624 | 3,622 | ||||||||||||
Orlando, FL | 0 | 2,200 | 6,134 | 476 | ||||||||||||
Topeka, KS | 0 | 0 | 3,680 | 0 | ||||||||||||
Memphis, TN | 2,364 | 1,235 | 13,380 | 1,478 | ||||||||||||
Houston, TX | 0 | 1,661 | 6,320 | 240 | ||||||||||||
Carrollton (Dallas), TX | 3,781 | 1,500 | 16,240 | 757 |
107 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 20182021
(in thousands)
Column A | Column B | Column C | Column D | |||||||||||||
Capitalization | ||||||||||||||||
Buildings and | Subsequent to | |||||||||||||||
Description | Encumbrances | Land | Improvements | Acquisition | ||||||||||||
Streetsboro (Cleveland), OH | $ | 9,300,481 | $ | 1,760,000 | $ | 17,840,000 | $ | -0- | ||||||||
Corpus Christi, TX | -0- | -0- | 4,764,500 | 43,830 | ||||||||||||
Halfmoon (Albany), NY | -0- | 1,190,000 | 4,335,600 | -0- | ||||||||||||
Lebanon (Cincinnati), OH | -0- | 240,000 | 4,176,000 | 36,425 | ||||||||||||
Olive Branch (Memphis, TN), MS (Anda) | 7,564,186 | 800,000 | 13,750,000 | -0- | ||||||||||||
Oklahoma City, OK (FDX Ground) | 3,416,097 | 1,410,000 | 8,043,000 | 3,131,462 | ||||||||||||
Waco, TX | 4,234,777 | 1,350,000 | 7,383,000 | 3,818,368 | ||||||||||||
Livonia (Detroit), MI | 6,294,503 | 320,000 | 13,380,000 | 62,030 | ||||||||||||
Olive Branch (Memphis, TN), MS (Milwaukee Tool) | 21,722,567 | 2,550,000 | 24,818,816 | 9,546,101 | ||||||||||||
Roanoke, VA (FDX Ground) | 4,395,246 | 1,740,000 | 8,460,000 | -0- | ||||||||||||
Green Bay, WI | 2,640,432 | 590,000 | 5,980,000 | -0- | ||||||||||||
Stewartville (Rochester), MN | 2,115,962 | 900,000 | 4,320,000 | -0- | ||||||||||||
Tulsa, OK | 1,685,288 | 790,000 | 2,910,000 | 48,031 | ||||||||||||
Buckner (Louisville), KY | 15,305,669 | 2,280,000 | 24,353,125 | 174,727 | ||||||||||||
Edwardsville (Kansas City), KS (International Paper) | 9,189,343 | 2,750,000 | 15,335,492 | 208,616 | ||||||||||||
Altoona, PA | 3,253,281 | 1,200,000 | 7,790,000 | 32,966 | ||||||||||||
Spring (Houston), TX | 7,924,865 | 1,890,000 | 13,391,318 | 4,013,078 | ||||||||||||
Indianapolis, IN | 10,437,151 | 3,745,572 | 20,446,000 | 1,312,510 | ||||||||||||
Sauget (St. Louis, MO), IL | 8,563,797 | 1,890,000 | 13,310,000 | 4,950 | ||||||||||||
Lindale (Tyler), TX | 5,638,258 | 540,000 | 9,390,000 | 35,550 | ||||||||||||
Kansas City, MO | 6,633,001 | 1,000,000 | 8,600,000 | 380,250 | ||||||||||||
Frankfort (Lexington), KY | 16,639,132 | 1,850,000 | 26,150,000 | -0- | ||||||||||||
Jacksonville, FL (FDX Ground) | 16,243,754 | 6,000,000 | 24,645,954 | 89,748 | ||||||||||||
Monroe (Cincinnati), OH | 7,126,384 | 1,800,000 | 11,137,000 | 4,587,760 | ||||||||||||
Greenwood (Indianapolis), IN | 20,159,025 | 2,250,000 | 35,234,574 | 27,497 | ||||||||||||
Ft. Worth (Dallas), TX | 20,753,864 | 8,200,000 | 27,100,832 | -0- | ||||||||||||
Cincinnati, OH | -0- | 800,000 | 5,950,000 | -0- | ||||||||||||
Rockford, IL (Collins Aerospace Systems) | -0- | 480,000 | 4,620,000 | -0- | ||||||||||||
Concord (Charlotte), NC | 17,813,451 | 4,305,000 | 27,670,897 | 1,068,900 | ||||||||||||
Covington (New Orleans), LA | 11,133,990 | 2,720,000 | 15,690,000 | -0- | ||||||||||||
Imperial (Pittsburgh), PA | 11,199,661 | 3,700,000 | 16,250,000 | -0- | ||||||||||||
Burlington (Seattle/Everett), WA | 17,757,364 | 8,000,000 | 22,210,680 | 17,867 | ||||||||||||
Colorado Springs, CO | 16,651,710 | 2,150,000 | 26,350,000 | 820,066 | ||||||||||||
Louisville, KY | 6,525,135 | 1,590,000 | 9,714,000 | -0- | ||||||||||||
Davenport (Orlando), FL | 23,702,918 | 7,060,000 | 30,720,000 | -0- | ||||||||||||
Olathe (Kansas City), KS | 19,956,867 | 2,350,000 | 29,387,000 | -0- | ||||||||||||
Hamburg (Buffalo), NY | 21,328,714 | 1,700,000 | 33,150,000 | -0- | ||||||||||||
Ft. Myers, FL | 13,280,803 | 2,486,417 | 18,400,000 | 777,218 | ||||||||||||
Walker (Grand Rapids), MI | 19,468,554 | 4,034,363 | 27,620,623 | -0- | ||||||||||||
Mesquite (Dallas), TX | 30,928,224 | 6,247,658 | 43,632,835 | -0- | ||||||||||||
Aiken (Augusta, GA), SC | 14,471,117 | 1,362,458 | 19,677,937 | -0- | ||||||||||||
Homestead (Miami), FL | 23,313,676 | 4,426,727 | 33,446,393 | -0- | ||||||||||||
Oklahoma City, OK (Bunzl) | 5,537,962 | 844,688 | 7,883,751 | -0- | ||||||||||||
Concord (Charlotte), NC | 24,863,355 | 4,306,684 | 35,736,461 | -0- | ||||||||||||
Kenton, OH | 11,473,387 | 854,780 | 17,026,827 | -0- | ||||||||||||
Stow, OH | 12,130,343 | 1,429,715 | 17,504,350 | -0- | ||||||||||||
Charleston, SC (FDX) | 13,683,131 | 4,639,283 | 16,847,923 | 32,205 | ||||||||||||
Oklahoma City, OK (Amazon) | 19,013,593 | 1,618,240 | 28,260,702 | -0- | ||||||||||||
Savannah, GA | 32,215,696 | 4,404,988 | 51,620,957 | -0- | ||||||||||||
Daytona Beach, FL | 19,187,819 | 3,119,640 | 26,853,559 | -0- | ||||||||||||
Mobile, AL | 18,832,395 | 2,480,474 | 30,571,842 | -0- | ||||||||||||
Charleston, SC (FDX Ground) | 29,860,000 | 7,103,106 | 39,473,274 | -0- | ||||||||||||
Braselton (Atlanta), GA | 39,700,000 | 13,964,652 | 46,262,482 | -0- | ||||||||||||
Shopping Center | ||||||||||||||||
Somerset, NJ | -0- | 34,317 | 637,097 | 2,440,363 | ||||||||||||
Vacant Land | ||||||||||||||||
Shelby County, TN | -0- | 11,065 | -0- | -0- | ||||||||||||
$ | 719,768,355 | $ | 224,719,083 | $ | 1,380,703,773 | $ | 114,155,563 |
Column A | Column B | Column C | Column D | |||||||||||||
Capitalization | ||||||||||||||||
Buildings and | Subsequent to | |||||||||||||||
Description | Encumbrances | Land | Improvements | Acquisition | ||||||||||||
Ft. Mill (Charlotte, NC), SC | $ | 0 | $ | 1,747 | $ | 10,045 | $ | 5,272 | ||||||||
Lebanon (Nashville), TN | 0 | 2,230 | 11,985 | 0 | ||||||||||||
Rockford, IL (Sherwin-Williams Co.) | 0 | 1,100 | 4,440 | 11 | ||||||||||||
Edinburg, TX | 0 | 1,000 | 6,414 | 4,625 | ||||||||||||
Streetsboro (Cleveland), OH | 7,332 | 1,760 | 17,840 | 0 | ||||||||||||
Corpus Christi, TX | 0 | 0 | 4,765 | 43 | ||||||||||||
Halfmoon (Albany), NY | 0 | 1,190 | 4,336 | 1,215 | ||||||||||||
Lebanon (Cincinnati), OH | 0 | 240 | 4,176 | 139 | ||||||||||||
Olive Branch (Memphis, TN), MS (Anda Pharmaceuticals Inc.) | 5,558 | 800 | 13,750 | 0 | ||||||||||||
Oklahoma City, OK (FDX Ground) | 1,767 | 1,410 | 8,043 | 3,172 | ||||||||||||
Waco, TX | 3,280 | 1,350 | 7,383 | 3,818 | ||||||||||||
Livonia (Detroit), MI | 4,267 | 320 | 13,380 | 188 | ||||||||||||
Olive Branch (Memphis, TN), MS (Milwaukee Tool) | 16,095 | 2,550 | 24,819 | 9,546 | ||||||||||||
Roanoke, VA (FDX Ground) | 2,866 | 1,740 | 8,460 | 0 | ||||||||||||
Green Bay, WI | 1,613 | 590 | 5,979 | 11 | ||||||||||||
Stewartville (Rochester), MN | 1,292 | 900 | 4,320 | 12 | ||||||||||||
Tulsa, OK | 1,267 | 790 | 2,910 | 48 | ||||||||||||
Buckner (Louisville), KY | 12,993 | 2,280 | 24,353 | 175 | ||||||||||||
Edwardsville (Kansas City), KS (International Paper) | 6,804 | 2,750 | 15,335 | 209 | ||||||||||||
Altoona, PA | 1,987 | 1,200 | 7,790 | 33 | ||||||||||||
Spring (Houston), TX | 5,931 | 1,890 | 13,391 | 4,048 | ||||||||||||
Indianapolis, IN | 7,366 | 3,746 | 20,446 | 1,312 | ||||||||||||
Sauget (St. Louis, MO), IL | 6,659 | 1,890 | 13,310 | 2,209 | ||||||||||||
Lindale (Tyler), TX | 4,393 | 948 | 9,390 | 1,965 | ||||||||||||
Kansas City, MO | 0 | 1,000 | 8,600 | 403 | ||||||||||||
Frankfort (Lexington), KY | 13,483 | 1,850 | 26,150 | 0 | ||||||||||||
Jacksonville, FL (FDX Ground) | 12,587 | 6,000 | 24,646 | 280 | ||||||||||||
Monroe (Cincinnati), OH | 11,453 | 1,800 | 11,137 | 8,640 | ||||||||||||
Greenwood (Indianapolis), IN (ULTA) | 15,855 | 2,250 | 35,235 | 289 | ||||||||||||
Ft. Worth (Dallas), TX | 16,364 | 8,200 | 27,101 | 347 | ||||||||||||
Cincinnati, OH | 0 | 800 | 5,950 | 0 | ||||||||||||
Rockford, IL (Collins Aerospace Systems) | 0 | 480 | 4,620 | 0 | ||||||||||||
Concord (Charlotte), NC | 14,197 | 4,305 | 27,671 | 1,078 | ||||||||||||
Covington (New Orleans), LA | 8,917 | 2,720 | 15,690 | 16 | ||||||||||||
Imperial (Pittsburgh), PA | 8,734 | 3,700 | 16,250 | 40 | ||||||||||||
Burlington (Seattle/Everett), WA | 14,264 | 8,000 | 22,211 | 160 | ||||||||||||
Colorado Springs, CO | 13,469 | 2,150 | 26,350 | 820 | ||||||||||||
Louisville, KY | 5,267 | 1,590 | 9,714 | 0 | ||||||||||||
Davenport (Orlando), FL | 19,243 | 7,060 | 30,721 | 306 | ||||||||||||
Olathe (Kansas City), KS | 16,217 | 3,616 | 29,387 | 2,444 | ||||||||||||
Hamburg (Buffalo), NY | 17,411 | 1,700 | 33,150 | 290 | ||||||||||||
Ft. Myers, FL | 10,873 | 2,486 | 18,400 | 798 | ||||||||||||
Walker (Grand Rapids), MI | 16,027 | 4,034 | 27,621 | 0 | ||||||||||||
Mesquite (Dallas), TX | 25,461 | 6,248 | 43,632 | 0 | ||||||||||||
Aiken (Augusta, GA), SC | 12,003 | 1,362 | 19,678 | 0 | ||||||||||||
Homestead (Miami), FL | 19,193 | 4,427 | 33,446 | 39 | ||||||||||||
Oklahoma City, OK (Bunzl) | 4,243 | 845 | 7,883 | 0 | ||||||||||||
Concord (Charlotte), NC | 20,587 | 4,307 | 35,736 | 0 | ||||||||||||
Kenton, OH | 9,592 | 855 | 17,027 | 849 | ||||||||||||
Stow, OH | 10,106 | 1,430 | 17,504 | 0 | ||||||||||||
Charleston, SC (FDX) | 11,444 | 4,639 | 16,848 | 52 | ||||||||||||
Oklahoma City, OK (Amazon) | 16,501 | 1,618 | 28,260 | 0 |
108 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 20182021
Column A | Column E (1) (2) | |||||||||||
Gross Amount at Which Carried | ||||||||||||
September 30, 2018 | ||||||||||||
Description | Land | Bldg & Imp | Total | |||||||||
Industrial Buildings | ||||||||||||
Monaca (Pittsburgh), PA | $ | 401,716 | $ | 7,508,950 | $ | 7,910,666 | ||||||
Ridgeland (Jackson), MS | 218,000 | 1,667,254 | 1,885,254 | |||||||||
Urbandale (Des Moines), IA | 310,000 | 2,213,644 | 2,523,644 | |||||||||
Richland (Jackson), MS | 211,000 | 1,689,691 | 1,900,691 | |||||||||
O’Fallon (St. Louis), MO | 264,000 | 3,981,913 | 4,245,913 | |||||||||
Fayetteville, NC | 172,000 | 5,279,629 | 5,451,629 | |||||||||
Schaumburg (Chicago), IL | 1,039,800 | 4,138,140 | 5,177,940 | |||||||||
Burr Ridge (Chicago), IL | 270,000 | 1,422,901 | 1,692,901 | |||||||||
Romulus (Detroit), MI | 531,000 | 4,201,671 | 4,732,671 | |||||||||
Liberty (Kansas City), MO | 723,000 | 6,674,881 | 7,397,881 | |||||||||
Omaha, NE | 1,170,000 | 4,774,691 | 5,944,691 | |||||||||
Charlottesville, VA | 1,170,000 | 3,285,702 | 4,455,702 | |||||||||
Jacksonville, FL (FDX) | 1,165,000 | 5,231,958 | 6,396,958 | |||||||||
West Chester Twp. (Cincinnati), OH | 695,000 | 5,038,686 | 5,733,686 | |||||||||
Mechanicsville (Richmond), VA | 1,160,000 | 6,632,395 | 7,792,395 | |||||||||
St. Joseph, MO | 800,000 | 12,563,648 | 13,363,648 | |||||||||
Newington (Hartford), CT | 410,000 | 3,084,108 | 3,494,108 | |||||||||
Cudahy (Milwaukee), WI | 980,000 | 8,786,361 | 9,766,361 | |||||||||
Beltsville (Washington, DC), MD | 3,200,000 | 11,312,355 | 14,512,355 | |||||||||
Carlstadt (New York, NY), NJ | 1,194,000 | 3,748,402 | 4,942,402 | |||||||||
Granite City (St. Louis, MO), IL | 340,000 | 12,357,848 | 12,697,848 | |||||||||
Winston-Salem, NC | 980,000 | 6,266,326 | 7,246,326 | |||||||||
Elgin (Chicago), IL | 1,280,000 | 5,697,442 | 6,977,442 | |||||||||
Cheektowaga (Buffalo), NY | 4,796,765 | 6,164,058 | 10,960,823 | |||||||||
Tolleson (Phoenix), AZ | 1,316,075 | 15,508,151 | 16,824,226 | |||||||||
Edwardsville (Kansas City), KS (Carlisle Tire) | 1,185,000 | 6,047,986 | 7,232,986 | |||||||||
Wheeling (Chicago), IL | 5,112,120 | 13,870,354 | 18,982,474 | |||||||||
Richmond, VA | 446,000 | 4,322,309 | 4,768,309 | |||||||||
Tampa, FL (FDX Ground) | 5,000,000 | 14,701,575 | 19,701,575 | |||||||||
Montgomery (Chicago), IL | 2,000,000 | 9,303,317 | 11,303,317 | |||||||||
Denver, CO | 1,150,000 | 5,204,051 | 6,354,051 | |||||||||
Hanahan (Charleston), SC (SAIC) | 1,129,000 | 12,281,102 | 13,410,102 | |||||||||
Hanahan (Charleston), SC (FDX Ground) | 930,000 | 6,684,653 | 7,614,653 | |||||||||
Augusta, GA (FDX Ground) | 614,406 | 4,748,899 | 5,363,305 | |||||||||
Tampa, FL (Tampa Bay Grand Prix) | 1,867,000 | 3,810,982 | 5,677,982 | |||||||||
Huntsville, AL | 748,115 | 5,913,696 | 6,661,811 | |||||||||
Augusta, GA (FDX) | 380,000 | 1,597,779 | 1,977,779 | |||||||||
Lakeland, FL | 261,000 | 1,782,226 | 2,043,226 | |||||||||
El Paso, TX | 3,225,195 | 9,205,997 | 12,431,192 | |||||||||
Richfield (Cleveland), OH | 2,676,848 | 13,770,330 | 16,447,178 | |||||||||
Tampa, FL (FDX) | 2,830,000 | 5,027,120 | 7,857,120 | |||||||||
Griffin (Atlanta), GA | 760,000 | 14,173,683 | 14,933,683 | |||||||||
Roanoke, VA (CHEP USA) | 1,853,000 | 5,610,672 | 7,463,672 | |||||||||
Orion, MI | 4,649,971 | 18,240,153 | 22,890,124 | |||||||||
Chattanooga, TN | 300,000 | 4,838,540 | 5,138,540 | |||||||||
Bedford Heights (Cleveland), OH | 990,000 | 5,929,836 | 6,919,836 | |||||||||
Punta Gorda, FL | -0- | 4,133,510 | 4,133,510 | |||||||||
Cocoa, FL | 1,881,316 | 12,246,133 | 14,127,449 | |||||||||
Orlando, FL | 2,200,000 | 6,574,524 | 8,774,524 | |||||||||
Topeka, KS | -0- | 3,679,843 | 3,679,843 | |||||||||
Memphis, TN | 1,234,987 | 13,380,000 | 14,614,987 | |||||||||
Houston, TX | 1,661,120 | 6,502,158 | 8,163,278 | |||||||||
Carrollton (Dallas), TX | 1,500,000 | 16,319,203 | 17,819,203 | |||||||||
Ft. Mill (Charlotte, NC), SC | 1,746,822 | 15,327,214 | 17,074,036 | |||||||||
Lebanon (Nashville), TN | 2,230,000 | 11,985,126 | 14,215,126 | |||||||||
Rockford, IL (Sherwin-Williams Co.) | 1,100,000 | 4,451,227 | 5,551,227 | |||||||||
Edinburg, TX | 1,000,000 | 11,039,014 | 12,039,014 |
(in thousands)
Column A | Column B | Column C | Column D | |||||||||||||
Capitalization | ||||||||||||||||
Buildings and | Subsequent to | |||||||||||||||
Description | Encumbrances | Land | Improvements | Acquisition | ||||||||||||
Savannah, GA (Shaw) | $ | 26,273 | $ | 4,405 | $ | 51,621 | $ | 0 | ||||||||
Daytona Beach, FL | 16,170 | 3,120 | 26,855 | 899 | ||||||||||||
Mobile, AL | 15,609 | 2,480 | 30,572 | 0 | ||||||||||||
Charleston, SC (FDX Ground) | 25,171 | 7,103 | 39,473 | 0 | ||||||||||||
Braselton (Atlanta), GA | 33,730 | 13,965 | 46,262 | 11 | ||||||||||||
Trenton, NJ | 47,039 | 8,336 | 75,652 | 0 | ||||||||||||
Savannah, GA (FDX Ground) | 15,091 | 3,441 | 24,091 | 0 | ||||||||||||
Lafayette, IN | 15,234 | 2,802 | 22,277 | 0 | ||||||||||||
Greenwood (Indianapolis), IN (Amazon) | 48,802 | 4,839 | 74,525 | 0 | ||||||||||||
Lancaster (Columbus), OH | 8,311 | 959 | 16,599 | 0 | ||||||||||||
Whitsett (Greensboro), NC | 28,277 | 2,735 | 43,976 | 0 | ||||||||||||
Ogden (Salt Lake City), UT | 7,805 | 1,287 | 11,380 | 0 | ||||||||||||
Oklahoma City, OK (Amazon II) | 9,272 | 1,378 | 13,584 | 0 | ||||||||||||
Plain City (Columbus), OH | 45,322 | 6,554 | 65,187 | 0 | ||||||||||||
Locust Grove (Atlanta), GA | 55,307 | 9,667 | 83,569 | 0 | ||||||||||||
Burlington, VT | 0 | 7,729 | 46,096 | 0 | ||||||||||||
Kodak (Knoxville), TN | 0 | 2,918 | 30,972 | 0 | ||||||||||||
Shopping Center | ||||||||||||||||
Somerset, NJ | 0 | 35 | 637 | 2,467 | ||||||||||||
Vacant Land | ||||||||||||||||
Shelby County, TN | 0 | 11 | 0 | 0 | ||||||||||||
$ | 839,622 | $ | 277,846 | $ | 1,884,965 | $ | 140,879 |
109 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
SCHEDULE III
REAL ESTATE AND ACCUMULATED GROSS DEPRECIATION
REAL ESTATE AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 20182021
(in thousands)
Column A | Column E (1) (2) | |||||||||||
Gross Amount at Which Carried | ||||||||||||
September 30, 2018 | ||||||||||||
Description | Land | Bldg & Imp | Total | |||||||||
Streetsboro (Cleveland), OH | $ | 1,760,000 | $ | 17,840,000 | $ | 19,600,000 | ||||||
Corpus Christi, TX | -0- | 4,808,330 | 4,808,330 | |||||||||
Halfmoon (Albany), NY | 1,190,000 | 4,335,600 | 5,525,600 | |||||||||
Lebanon (Cincinnati), OH | 240,000 | 4,212,425 | 4,452,425 | |||||||||
Olive Branch (Memphis, TN), MS (Anda Pharmaceuticals Inc.) | 800,000 | 13,750,000 | 14,550,000 | |||||||||
Oklahoma City, OK (FDX Ground) | 1,410,000 | 11,174,462 | 12,584,462 | |||||||||
Waco, TX | 1,350,000 | 11,201,368 | 12,551,368 | |||||||||
Livonia (Detroit), MI | 320,000 | 13,442,030 | 13,762,030 | |||||||||
Olive Branch (Memphis, TN), MS (Milwaukee Tool) | 2,550,000 | 34,364,917 | 36,914,917 | |||||||||
Roanoke, VA (FDX Ground) | 1,740,000 | 8,460,000 | 10,200,000 | |||||||||
Green Bay, WI | 590,000 | 5,980,000 | 6,570,000 | |||||||||
Stewartville (Rochester), MN | 900,000 | 4,320,000 | 5,220,000 | |||||||||
Tulsa, OK | 790,000 | 2,958,031 | 3,748,031 | |||||||||
Buckner (Louisville), KY | 2,280,000 | 24,527,852 | 26,807,852 | |||||||||
Edwardsville (Kansas City), KS (International Paper) | 2,750,000 | 15,544,108 | 18,294,108 | |||||||||
Altoona, PA | 1,200,000 | 7,822,966 | 9,022,966 | |||||||||
Spring (Houston), TX | 1,890,000 | 17,404,396 | 19,294,396 | |||||||||
Indianapolis, IN | 3,745,572 | 21,758,510 | 25,504,082 | |||||||||
Sauget (St. Louis, MO), IL | 1,890,000 | 13,314,950 | 15,204,950 | |||||||||
Lindale (Tyler), TX | 540,000 | 9,425,550 | 9,965,550 | |||||||||
Kansas City, MO | 1,000,000 | 8,980,250 | 9,980,250 | |||||||||
Frankfort (Lexington), KY | 1,850,000 | 26,150,000 | 28,000,000 | |||||||||
Jacksonville, FL (FDX Ground) | 6,000,000 | 24,735,702 | 30,735,702 | |||||||||
Monroe (Cincinnati), OH | 1,800,000 | 15,724,760 | 17,524,760 | |||||||||
Greenwood (Indianapolis), IN | 2,250,000 | 35,262,071 | 37,512,071 | |||||||||
Ft. Worth (Dallas), TX | 8,200,000 | 27,100,832 | 35,300,832 | |||||||||
Cincinnati, OH | 800,000 | 5,950,000 | 6,750,000 | |||||||||
Rockford, IL (Collins Aerospace Systems) | 480,000 | 4,620,000 | 5,100,000 | |||||||||
Concord (Charlotte), NC | 4,305,000 | 28,739,797 | 33,044,797 | |||||||||
Covington (New Orleans), LA | 2,720,000 | 15,690,000 | 18,410,000 | |||||||||
Imperial (Pittsburgh), PA | 3,700,000 | 16,250,000 | 19,950,000 | |||||||||
Burlington (Seattle/Everett), WA | 8,000,000 | 22,228,547 | 30,228,547 | |||||||||
Colorado Springs, CO | 2,150,000 | 27,170,066 | 29,320,066 | |||||||||
Louisville, KY | 1,590,000 | 9,714,000 | 11,304,000 | |||||||||
Davenport (Orlando), FL | 7,060,000 | 30,720,000 | 37,780,000 | |||||||||
Olathe (Kansas City), KS | 2,350,000 | 29,387,000 | 31,737,000 | |||||||||
Hamburg (Buffalo), NY | 1,700,000 | 33,150,000 | 34,850,000 | |||||||||
Ft. Myers, FL | 2,486,417 | 19,177,218 | 21,663,635 | |||||||||
Walker (Grand Rapids), MI | 4,034,363 | 27,620,623 | 31,654,986 | |||||||||
Mesquite (Dallas), TX | 6,247,658 | 43,632,835 | 49,880,493 | |||||||||
Aiken (Augusta, GA), SC | 1,362,458 | 19,677,937 | 21,040,395 | |||||||||
Homestead (Miami), FL | 4,426,727 | 33,446,393 | 37,873,120 | |||||||||
Oklahoma City, OK (Bunzl) | 844,688 | 7,883,751 | 8,728,439 | |||||||||
Concord (Charlotte), NC | 4,306,684 | 35,736,461 | 40,043,145 | |||||||||
Kenton, OH | 854,780 | 17,026,827 | 17,881,607 | |||||||||
Stow, OH | 1,429,715 | 17,504,350 | 18,934,065 | |||||||||
Charleston, SC (FDX) | 4,639,283 | 16,880,128 | 21,519,411 | |||||||||
Oklahoma City, OK (Amazon) | 1,618,240 | 28,260,702 | 29,878,942 | |||||||||
Savannah, GA | 4,404,988 | 51,620,957 | 56,025,945 | |||||||||
Daytona Beach, FL | 3,119,640 | 26,853,559 | 29,973,199 | |||||||||
Mobile, AL | 2,480,474 | 30,571,842 | 33,052,316 | |||||||||
Charleston, SC (FDX Ground) | 7,103,106 | 39,473,274 | 46,576,380 | |||||||||
Braselton (Atlanta), GA | 13,964,652 | 46,262,482 | 60,227,134 | |||||||||
Shopping Center | ||||||||||||
Somerset, NJ | 34,317 | 3,077,460 | 3,111,777 | |||||||||
Vacant Land | ||||||||||||
Shelby County, TN | 11,065 | -0- | 11,065 | |||||||||
$ | 224,719,083 | $ | 1,494,859,336 | $ | 1,719,578,419 |
Column A | Column E (1) (2) | |||||||||||
Gross Amount at Which Carried | ||||||||||||
September 30, 2021 | ||||||||||||
Description | Land | Bldg & Imp | Total | |||||||||
Industrial Buildings | ||||||||||||
Monaca (Pittsburgh), PA | $ | 402 | $ | 7,562 | $ | 7,964 | ||||||
Ridgeland (Jackson), MS | 218 | 2,738 | 2,956 | |||||||||
Urbandale (Des Moines), IA | 310 | 2,234 | 2,544 | |||||||||
Richland (Jackson), MS | 211 | 1,690 | 1,901 | |||||||||
O’Fallon (St. Louis), MO | 264 | 3,986 | 4,250 | |||||||||
Fayetteville, NC | 172 | 5,286 | 5,458 | |||||||||
Schaumburg (Chicago), IL | 1,040 | 4,407 | 5,447 | |||||||||
Burr Ridge (Chicago), IL | 270 | 1,615 | 1,885 | |||||||||
Romulus (Detroit), MI | 531 | 4,418 | 4,949 | |||||||||
Liberty (Kansas City), MO | 724 | 7,075 | 7,799 | |||||||||
Omaha, NE | 1,170 | 4,794 | 5,964 | |||||||||
Charlottesville, VA | 1,170 | 3,292 | 4,462 | |||||||||
Jacksonville, FL (FDX) | 1,165 | 5,419 | 6,584 | |||||||||
West Chester Twp. (Cincinnati), OH | 695 | 5,039 | 5,734 | |||||||||
Mechanicsville (Richmond), VA | 1,160 | 6,676 | 7,836 | |||||||||
St. Joseph, MO | 800 | 12,705 | 13,505 | |||||||||
Newington (Hartford), CT | 410 | 3,116 | 3,526 | |||||||||
Cudahy (Milwaukee), WI | 980 | 8,835 | 9,815 | |||||||||
Beltsville (Washington, DC), MD | 3,200 | 11,521 | 14,721 | |||||||||
Granite City (St. Louis, MO), IL | 340 | 12,418 | 12,758 | |||||||||
Winston-Salem, NC | 980 | 6,447 | 7,427 | |||||||||
Elgin (Chicago), IL | 1,280 | 5,902 | 7,182 | |||||||||
Cheektowaga (Buffalo), NY | 4,797 | 6,164 | 10,961 | |||||||||
Tolleson (Phoenix), AZ | 1,316 | 15,508 | 16,824 | |||||||||
Edwardsville (Kansas City), KS (Carlstar) | 1,185 | 6,098 | 7,283 | |||||||||
Wheeling (Chicago), IL | 5,112 | 14,513 | 19,625 | |||||||||
Richmond, VA | 446 | 4,651 | 5,097 | |||||||||
Tampa, FL (FDX Ground) | 5,000 | 14,745 | 19,745 | |||||||||
Montgomery (Chicago), IL | 2,000 | 9,303 | 11,303 | |||||||||
Denver, CO | 1,150 | 5,224 | 6,374 | |||||||||
Hanahan (Charleston), SC (SAIC) | 1,129 | 13,334 | 14,463 | |||||||||
Hanahan (Charleston), SC (Amazon) | 930 | 8,376 | 9,306 | |||||||||
Augusta, GA (FDX Ground) | 614 | 4,749 | 5,363 | |||||||||
Tampa, FL (Tampa Bay Grand Prix) | 1,867 | 3,811 | 5,678 | |||||||||
Huntsville, AL | 748 | 5,914 | 6,662 | |||||||||
Augusta, GA (FDX) | 380 | 1,613 | 1,993 | |||||||||
Lakeland, FL | 261 | 1,782 | 2,043 | |||||||||
El Paso, TX | 3,225 | 9,206 | 12,431 | |||||||||
Richfield (Cleveland), OH | 2,677 | 13,960 | 16,637 | |||||||||
Tampa, FL (FDX) | 2,830 | 5,518 | 8,348 | |||||||||
Griffin (Atlanta), GA | 760 | 14,322 | 15,082 | |||||||||
Roanoke, VA (CHEP USA) | 1,853 | 5,619 | 7,472 | |||||||||
Orion, MI | 4,650 | 18,506 | 23,156 | |||||||||
Chattanooga, TN | 300 | 5,069 | 5,369 | |||||||||
Bedford Heights (Cleveland), OH | 990 | 6,314 | 7,304 | |||||||||
Punta Gorda, FL | 0 | 4,134 | 4,134 | |||||||||
Cocoa, FL | 1,881 | 12,246 | 14,127 | |||||||||
Orlando, FL | 2,200 | 6,610 | 8,810 | |||||||||
Topeka, KS | 0 | 3,680 | 3,680 | |||||||||
Memphis, TN | 1,235 | 14,858 | 16,093 | |||||||||
Houston, TX | 1,661 | 6,560 | 8,221 | |||||||||
Carrollton (Dallas), TX | 1,500 | 16,997 | 18,497 |
110 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 2021
(in thousands)
Column A | Column E (1) (2) | |||||||||||
Gross Amount at Which Carried | ||||||||||||
September 30, 2021 | ||||||||||||
Description | Land | Bldg & Imp | Total | |||||||||
Ft. Mill (Charlotte, NC), SC | $ | 1,747 | $ | 15,317 | $ | 17,064 | ||||||
Lebanon (Nashville), TN | 2,230 | 11,985 | 14,215 | |||||||||
Rockford, IL (Sherwin-Williams Co.) | 1,100 | 4,451 | 5,551 | |||||||||
Edinburg, TX | 1,000 | 11,039 | 12,039 | |||||||||
Streetsboro (Cleveland), OH | 1,760 | 17,840 | 19,600 | |||||||||
Corpus Christi, TX | 0 | 4,808 | 4,808 | |||||||||
Halfmoon (Albany), NY | 1,190 | 5,551 | 6,741 | |||||||||
Lebanon (Cincinnati), OH | 240 | 4,315 | 4,555 | |||||||||
Olive Branch (Memphis, TN), MS (Anda Pharmaceuticals Inc.) | 800 | 13,750 | 14,550 | |||||||||
Oklahoma City, OK (FDX Ground) | 1,410 | 11,215 | 12,625 | |||||||||
Waco, TX | 1,350 | 11,201 | 12,551 | |||||||||
Livonia (Detroit), MI | 320 | 13,568 | 13,888 | |||||||||
Olive Branch (Memphis, TN), MS (Milwaukee Tool) | 2,550 | 34,365 | 36,915 | |||||||||
Roanoke, VA (FDX Ground) | 1,740 | 8,460 | 10,200 | |||||||||
Green Bay, WI | 590 | 5,990 | 6,580 | |||||||||
Stewartville (Rochester), MN | 900 | 4,332 | 5,232 | |||||||||
Tulsa, OK | 790 | 2,958 | 3,748 | |||||||||
Buckner (Louisville), KY | 2,280 | 24,528 | 26,808 | |||||||||
Edwardsville (Kansas City), KS (International Paper) | 2,750 | 15,544 | 18,294 | |||||||||
Altoona, PA | 1,200 | 7,823 | 9,023 | |||||||||
Spring (Houston), TX | 1,890 | 17,439 | 19,329 | |||||||||
Indianapolis, IN | 3,746 | 21,758 | 25,504 | |||||||||
Sauget (St. Louis, MO), IL | 1,890 | 15,519 | 17,409 | |||||||||
Lindale (Tyler), TX | 948 | 11,355 | 12,303 | |||||||||
Kansas City, MO | 1,000 | 9,003 | 10,003 | |||||||||
Frankfort (Lexington), KY | 1,850 | 26,150 | 28,000 | |||||||||
Jacksonville, FL (FDX Ground) | 6,000 | 24,926 | 30,926 | |||||||||
Monroe (Cincinnati), OH | 1,800 | 19,777 | 21,577 | |||||||||
Greenwood (Indianapolis), IN (ULTA) | 2,250 | 35,524 | 37,774 | |||||||||
Ft. Worth (Dallas), TX | 8,200 | 27,448 | 35,648 | |||||||||
Cincinnati, OH | 800 | 5,950 | 6,750 | |||||||||
Rockford, IL (Collins Aerospace Systems) | 480 | 4,620 | 5,100 | |||||||||
Concord (Charlotte), NC | 4,305 | 28,749 | 33,054 | |||||||||
Covington (New Orleans), LA | 2,720 | 15,706 | 18,426 | |||||||||
Imperial (Pittsburgh), PA | 3,700 | 16,290 | 19,990 | |||||||||
Burlington (Seattle/Everett), WA | 8,000 | 22,371 | 30,371 | |||||||||
Colorado Springs, CO | 2,150 | 27,170 | 29,320 | |||||||||
Louisville, KY | 1,590 | 9,714 | 11,304 | |||||||||
Davenport (Orlando), FL | 7,060 | 31,027 | 38,087 | |||||||||
Olathe (Kansas City), KS | 3,616 | 31,831 | 35,447 | |||||||||
Hamburg (Buffalo), NY | 1,700 | 33,440 | 35,140 | |||||||||
Ft. Myers, FL | 2,486 | 19,198 | 21,684 | |||||||||
Walker (Grand Rapids), MI | 4,034 | 27,621 | 31,655 | |||||||||
Mesquite (Dallas), TX | 6,248 | 43,632 | 49,880 | |||||||||
Aiken (Augusta, GA), SC | 1,362 | 19,678 | 21,040 | |||||||||
Homestead (Miami), FL | 4,427 | 33,485 | 37,912 | |||||||||
Oklahoma City, OK (Bunzl) | 845 | 7,883 | 8,728 | |||||||||
Concord (Charlotte), NC | 4,307 | 35,736 | 40,043 | |||||||||
Kenton, OH | 855 | 17,876 | 18,731 | |||||||||
Stow, OH | 1,430 | 17,504 | 18,934 | |||||||||
Charleston, SC (FDX) | 4,639 | 16,900 | 21,539 | |||||||||
Oklahoma City, OK (Amazon) | 1,618 | 28,260 | 29,878 |
111 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 2021
(in thousands)
Column A | Column E (1) (2) | |||||||||||
Gross Amount at Which Carried | ||||||||||||
September 30, 2021 | ||||||||||||
Description | Land | Bldg & Imp | Total | |||||||||
Savannah, GA (Shaw) | $ | 4,405 | $ | 51,621 | $ | 56,026 | ||||||
Daytona Beach, FL | 3,120 | 27,754 | 30,874 | |||||||||
Mobile, AL | 2,480 | 30,572 | 33,052 | |||||||||
Charleston, SC (FDX Ground) | 7,103 | 39,473 | 46,576 | |||||||||
Braselton (Atlanta), GA | 13,965 | 46,273 | 60,238 | |||||||||
Trenton, NJ | 8,336 | 75,652 | 83,988 | |||||||||
Savannah, GA (FDX Ground) | 3,441 | 24,091 | 27,532 | |||||||||
Lafayette, IN | 2,802 | 22,277 | 25,079 | |||||||||
Greenwood (Indianapolis), IN (Amazon) | 4,839 | 74,525 | 79,364 | |||||||||
Lancaster (Columbus), OH | 959 | 16,599 | 17,558 | |||||||||
Whitsett (Greensboro), NC | 2,735 | 43,976 | 46,711 | |||||||||
Ogden (Salt Lake City), UT | 1,287 | 11,380 | 12,667 | |||||||||
Oklahoma City, OK (Amazon II) | 1,378 | 13,584 | 14,962 | |||||||||
Plain City (Columbus), OH | 6,554 | 65,187 | 71,741 | |||||||||
Locust Grove (Atlanta), GA | 9,667 | 83,569 | 93,236 | |||||||||
Burlington, VT | 7,729 | 46,096 | 53,825 | |||||||||
Kodak (Knoxville), TN | 2,918 | 30,972 | 33,890 | |||||||||
Shopping Center | ||||||||||||
Somerset, NJ | 35 | 3,104 | 3,139 | |||||||||
Vacant Land | ||||||||||||
Shelby County, TN | 11 | 0 | 11 | |||||||||
$ | 277,846 | $ | 2,025,844 | $ | 2,303,690 |
(1) | See pages |
(2) | The aggregate cost for Federal tax purposes approximates historical cost. |
112 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
SCHEDULE III
SCHEDULE OF ACCUMULATED DEPRECIATION LIFE
REAL ESTATE AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 20182021
(in thousands)
Column A | Column F | Column G | Column H | Column I | ||||||||||||
Accumulated | Date of | Date | Depreciable | |||||||||||||
Description | Depreciation | Construction | Acquired | Life | ||||||||||||
Industrial Buildings | ||||||||||||||||
Monaca (Pittsburgh), PA | $ | 2,957,471 | 1977 | 1977 | (3 | ) | ||||||||||
Ridgeland (Jackson), MS | 1,313,173 | 1988 | 1993 | (3 | ) | |||||||||||
Urbandale (Des Moines), IA | 1,211,364 | 1985 | 1994 | (3 | ) | |||||||||||
Richland (Jackson), MS | 982,066 | 1986 | 1994 | (3 | ) | |||||||||||
O’Fallon (St. Louis), MO | 2,361,768 | 1989 | 1994 | (3 | ) | |||||||||||
Fayetteville, NC | 2,931,202 | 1996 | 1997 | (3 | ) | |||||||||||
Schaumburg (Chicago), IL | 2,283,345 | 1997 | 1997 | (3 | ) | |||||||||||
Burr Ridge (Chicago), IL | 741,290 | 1997 | 1997 | (3 | ) | |||||||||||
Romulus (Detroit), MI | 2,043,189 | 1998 | 1998 | (3 | ) | |||||||||||
Liberty (Kansas City), MO | 3,497,982 | 1997 | 1998 | (3 | ) | |||||||||||
Omaha, NE | 2,358,451 | 1999 | 1999 | (3 | ) | |||||||||||
Charlottesville, VA | 1,588,202 | 1998 | 1999 | (3 | ) | |||||||||||
Jacksonville, FL (FDX) | 2,619,003 | 1998 | 1999 | (3 | ) | |||||||||||
West Chester Twp. (Cincinnati), OH | 2,305,181 | 1999 | 2000 | (3 | ) | |||||||||||
Mechanicsville (Richmond), VA | 3,007,443 | 2000 | 2001 | (3 | ) | |||||||||||
St. Joseph, MO | 5,452,138 | 2000 | 2001 | (3 | ) | |||||||||||
Newington (Hartford), CT | 1,377,254 | 2001 | 2001 | (3 | ) | |||||||||||
Cudahy (Milwaukee), WI | 3,296,930 | 2001 | 2001 | (3 | ) | |||||||||||
Beltsville (Washington, DC), MD | 4,151,339 | 2000 | 2001 | (3 | ) | |||||||||||
Carlstadt (New York, NY), NJ | 1,029,584 | 1977 | 2001 | (3 | ) | |||||||||||
Granite City (St. Louis, MO), IL | 5,183,974 | 2001 | 2001 | (3 | ) | |||||||||||
Winston-Salem, NC | 2,617,877 | 2001 | 2002 | (3 | ) | |||||||||||
Elgin (Chicago), IL | 2,436,368 | 2002 | 2002 | (3 | ) | |||||||||||
Cheektowaga (Buffalo), NY | 1,851,798 | 2000 | 2002 | (3 | ) | |||||||||||
Tolleson (Phoenix), AZ | 6,144,623 | 2002 | 2003 | (3 | ) | |||||||||||
Edwardsville (Kansas City), KS (Carlisle Tire) | 2,538,608 | 2002 | 2003 | (3 | ) | |||||||||||
Wheeling (Chicago), IL | 4,430,770 | 2003 | 2003 | (3 | ) | |||||||||||
Richmond, VA | 1,545,670 | 2004 | 2004 | (3 | ) | |||||||||||
Tampa, FL (FDX Ground) | 4,921,899 | 2004 | 2004 | (3 | ) | |||||||||||
Montgomery (Chicago), IL | 2,761,952 | 2004 | 2004 | (3 | ) | |||||||||||
Denver, CO | 1,704,122 | 2005 | 2005 | (3 | ) | |||||||||||
Hanahan (Charleston), SC (SAIC) | 4,343,346 | 2002 | 2005 | (3 | ) | |||||||||||
Hanahan (Charleston), SC (FDX Ground) | 2,071,138 | 2005 | 2005 | (3 | ) | |||||||||||
Augusta, GA (FDX Ground) | 1,509,465 | 2005 | 2005 | (3 | ) | |||||||||||
Tampa, FL (Tampa Bay Grand Prix) | 1,144,249 | 1989 | 2005 | (3 | ) | |||||||||||
Huntsville, AL | 1,249,093 | 2005 | 2005 | (3 | ) | |||||||||||
Augusta, GA (FDX) | 463,245 | 1993 | 2006 | (3 | ) | |||||||||||
Lakeland, FL | 573,621 | 1993 | 2006 | (3 | ) | |||||||||||
El Paso, TX | 1,977,282 | 2005 | 2006 | (3 | ) | |||||||||||
Richfield (Cleveland), OH | 3,083,114 | 2006 | 2006 | (3 | ) | |||||||||||
Tampa, FL (FDX) | 1,515,388 | 2006 | 2006 | (3 | ) | |||||||||||
Griffin (Atlanta), GA | 4,493,178 | 2006 | 2006 | (3 | ) | |||||||||||
Roanoke, VA (CHEP USA) | 1,706,454 | 1996 | 2007 | (3 | ) | |||||||||||
Orion, MI | 4,488,942 | 2007 | 2007 | (3 | ) | |||||||||||
Chattanooga, TN | 1,388,863 | 2002 | 2007 | (3 | ) | |||||||||||
Bedford Heights (Cleveland), OH | 1,893,515 | 1998 | 2007 | (3 | ) | |||||||||||
Punta Gorda, FL | 1,058,498 | 2007 | 2007 | (3 | ) | |||||||||||
Cocoa, FL | 2,758,147 | 2006 | 2008 | (3 | ) | |||||||||||
Orlando, FL | 1,830,818 | 1997 | 2008 | (3 | ) | |||||||||||
Topeka, KS | 896,483 | 2006 | 2009 | (3 | ) | |||||||||||
Memphis, TN | 2,916,162 | 1994 | 2010 | (3 | ) | |||||||||||
Houston, TX | 1,440,389 | 2005 | 2010 | (3 | ) | |||||||||||
Carrollton (Dallas), TX | 3,555,283 | 2009 | 2010 | (3 | ) | |||||||||||
Ft. Mill (Charlotte, NC), SC | 2,654,658 | 2009 | 2010 | (3 | ) | |||||||||||
Lebanon (Nashville), TN | 2,151,164 | 1993 | 2011 | (3 | ) | |||||||||||
Rockford, IL (Sherwin-Williams Co.) | 859,960 | 1998-2008 | 2011 | (3 | ) | |||||||||||
Edinburg, TX | 1,472,631 | 2011 | 2011 | (3 | ) |
Column A | Column F | Column G | Column H | Column I | ||||||||||||
Accumulated | Date of | Date | Depreciable | |||||||||||||
Description | Depreciation | Construction | Acquired | Life | ||||||||||||
Industrial Buildings | ||||||||||||||||
Monaca (Pittsburgh), PA | $ | 3,730 | 1973 | 1973 | (3 | ) | ||||||||||
Ridgeland (Jackson), MS | 1,585 | 1989 | 1993 | (3 | ) | |||||||||||
Urbandale (Des Moines), IA | 1,459 | 1985 | 1994 | (3 | ) | |||||||||||
Richland (Jackson), MS | 1,200 | 1986 | 1994 | (3 | ) | |||||||||||
O’Fallon (St. Louis), MO | 2,735 | 1989 | 1995 | (3 | ) | |||||||||||
Fayetteville, NC | 3,532 | 1996 | 1997 | (3 | ) | |||||||||||
Schaumburg (Chicago), IL | 2,671 | 1997 | 1997 | (3 | ) | |||||||||||
Burr Ridge (Chicago), IL | 869 | 1998 | 1998 | (3 | ) | |||||||||||
Romulus (Detroit), MI | 2,477 | 1998 | 1998 | (3 | ) | |||||||||||
Liberty (Kansas City), MO | 4,128 | 1998 | 1998 | (3 | ) | |||||||||||
Omaha, NE | 2,734 | 1999 | 1999 | (3 | ) | |||||||||||
Charlottesville, VA | 1,905 | 1998 | 1999 | (3 | ) | |||||||||||
Jacksonville, FL (FDX) | 3,159 | 1997 | 1999 | (3 | ) | |||||||||||
West Chester Twp. (Cincinnati), OH | 2,842 | 1999 | 2000 | (3 | ) | |||||||||||
Mechanicsville (Richmond), VA | 3,560 | 2000 | 2001 | (3 | ) | |||||||||||
St. Joseph, MO | 6,518 | 2001 | 2001 | (3 | ) | |||||||||||
Newington (Hartford), CT | 1,635 | 2001 | 2001 | (3 | ) | |||||||||||
Cudahy (Milwaukee), WI | 4,075 | 2001 | 2001 | (3 | ) | |||||||||||
Beltsville (Washington, DC), MD | 5,045 | 2001 | 2001 | (3 | ) | |||||||||||
Granite City (St. Louis, MO), IL | 6,252 | 2001 | 2002 | (3 | ) | |||||||||||
Winston-Salem, NC | 3,239 | 2001 | 2002 | (3 | ) | |||||||||||
Elgin (Chicago), IL | 2,984 | 2002 | 2002 | (3 | ) | |||||||||||
Cheektowaga (Buffalo), NY | 2,330 | 2001 | 2007 | (3 | ) | |||||||||||
Tolleson (Phoenix), AZ | 7,674 | 2002 | 2003 | (3 | ) | |||||||||||
Edwardsville (Kansas City), KS (Carlstar) | 3,014 | 2002 | 2003 | (3 | ) | |||||||||||
Wheeling (Chicago), IL | 5,600 | 2003 | 2003 | (3 | ) | |||||||||||
Richmond, VA | 1,937 | 2004 | 2004 | (3 | ) | |||||||||||
Tampa, FL (FDX Ground) | 6,059 | 2004 | 2004 | (3 | ) | |||||||||||
Montgomery (Chicago), IL | 3,484 | 2000 | 2005 | (3 | ) | |||||||||||
Denver, CO | 2,108 | 2004 | 2005 | (3 | ) | |||||||||||
Hanahan (Charleston), SC (SAIC) | 5,791 | 2002 | 2005 | (3 | ) | |||||||||||
Hanahan (Charleston), SC (Amazon) | 2,852 | 2005 | 2005 | (3 | ) | |||||||||||
Augusta, GA (FDX Ground) | 1,878 | 2004 | 2005 | (3 | ) | |||||||||||
Tampa, FL (Tampa Bay Grand Prix) | 1,448 | 1989 | 2005 | (3 | ) | |||||||||||
Huntsville, AL | 1,714 | 2004 | 2005 | (3 | ) | |||||||||||
Augusta, GA (FDX) | 602 | 1993 | 2007 | (3 | ) | |||||||||||
Lakeland, FL | 724 | 1993 | 2007 | (3 | ) | |||||||||||
El Paso, TX | 2,780 | 2006 | 2007 | (3 | ) | |||||||||||
Richfield (Cleveland), OH | 4,156 | 2005 | 2006 | (3 | ) | |||||||||||
Tampa, FL (FDX) | 2,004 | 1997 | 2006 | (3 | ) | |||||||||||
Griffin (Atlanta), GA | 5,716 | 2003 | 2006 | (3 | ) | |||||||||||
Roanoke, VA (CHEP USA) | 2,286 | 1996 | 2007 | (3 | ) | |||||||||||
Orion, MI | 5,902 | 2007 | 2007 | (3 | ) | |||||||||||
Chattanooga, TN | 1,827 | 2003 | 2007 | (3 | ) | |||||||||||
Bedford Heights (Cleveland), OH | 2,530 | 1998 | 2007 | (3 | ) | |||||||||||
Punta Gorda, FL | 1,398 | 2007 | 2007 | (3 | ) | |||||||||||
Cocoa, FL | 3,725 | 2006 | 2008 | (3 | ) | |||||||||||
Orlando, FL | 2,405 | 1997 | 2008 | (3 | ) | |||||||||||
Topeka, KS | 1,179 | 2006 | 2009 | (3 | ) | |||||||||||
Memphis, TN | 4,278 | 1994 | 2010 | (3 | ) | |||||||||||
Houston, TX | 2,019 | 2006 | 2010 | (3 | ) | |||||||||||
Carrollton (Dallas), TX | 4,908 | 2009 | 2010 | (3 | ) |
113 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 20182021
(in thousands)
Column A | Column F | Column G | Column H | Column I | ||||||||||||
Accumulated | Date of | Date | Depreciable | |||||||||||||
Description | Depreciation | Construction | Acquired | Life | ||||||||||||
Streetsboro (Cleveland), OH | $ | 2,973,333 | 2012 | 2012 | (3 | ) | ||||||||||
Corpus Christi, TX | 797,350 | 2012 | 2012 | (3 | ) | |||||||||||
Halfmoon (Albany), NY | 722,600 | 2012 | 2012 | (3 | ) | |||||||||||
Lebanon (Cincinnati), OH | 704,125 | 2012 | 2012 | (3 | ) | |||||||||||
Olive Branch (Memphis, TN), MS (Anda Pharmaceuticals Inc.) | 2,203,526 | 2012 | 2012 | (3 | ) | |||||||||||
Oklahoma City, OK (FDX Ground) | 1,599,042 | 2012 | 2012 | (3 | ) | |||||||||||
Waco, TX | 1,498,728 | 2012 | 2012 | (3 | ) | |||||||||||
Livonia (Detroit), MI | 2,046,869 | 1999 | 2013 | (3 | ) | |||||||||||
Olive Branch (Memphis, TN), MS (Milwaukee Tool) | 4,044,199 | 2013 | 2013 | (3 | ) | |||||||||||
Roanoke, VA (FDX Ground) | 1,147,885 | 2013 | 2013 | (3 | ) | |||||||||||
Green Bay, WI | 766,667 | 2013 | 2013 | (3 | ) | |||||||||||
Stewartville (Rochester), MN | 553,846 | 2013 | 2013 | (3 | ) | |||||||||||
Tulsa, OK | 391,119 | 2009 | 2014 | (3 | ) | |||||||||||
Buckner (Louisville), KY | 3,114,323 | 2014 | 2014 | (3 | ) | |||||||||||
Edwardsville (Kansas City), KS (International Paper) | 2,001,778 | 2014 | 2014 | (3 | ) | |||||||||||
Altoona, PA | 986,269 | 2014 | 2014 | (3 | ) | |||||||||||
Spring (Houston), TX | 2,077,166 | 2014 | 2014 | (3 | ) | |||||||||||
Indianapolis, IN | 2,239,839 | 2014 | 2014 | (3 | ) | |||||||||||
Sauget (St. Louis, MO), IL | 1,366,159 | 2015 | 2015 | (3 | ) | |||||||||||
Lindale (Tyler), TX | 966,498 | 2015 | 2015 | (3 | ) | |||||||||||
Kansas City, MO | 885,643 | 2015 | 2015 | (3 | ) | |||||||||||
Frankfort (Lexington), KY | 2,570,299 | 2015 | 2015 | (3 | ) | |||||||||||
Jacksonville, FL (FDX Ground) | 2,323,375 | 2015 | 2015 | (3 | ) | |||||||||||
Monroe (Cincinnati), OH | 1,023,271 | 2015 | 2015 | (3 | ) | |||||||||||
Greenwood (Indianapolis), IN | 3,091,837 | 2015 | 2015 | (3 | ) | |||||||||||
Ft. Worth (Dallas), TX | 2,200,495 | 2015 | 2015 | (3 | ) | |||||||||||
Cincinnati, OH | 470,406 | 2014 | 2015 | (3 | ) | |||||||||||
Rockford, IL (Collins Aerospace Systems) | 473,846 | 2012 | 2015 | (3 | ) | |||||||||||
Concord (Charlotte), NC | 2,314,361 | 2016 | 2016 | (3 | ) | |||||||||||
Covington (New Orleans), LA | 1,139,872 | 2016 | 2016 | (3 | ) | |||||||||||
Imperial (Pittsburgh), PA | 1,076,389 | 2016 | 2016 | (3 | ) | |||||||||||
Burlington (Seattle/Everett), WA | 1,426,792 | 2016 | 2016 | (3 | ) | |||||||||||
Colorado Springs, CO | 1,593,580 | 2016 | 2016 | (3 | ) | |||||||||||
Louisville, KY | 581,179 | 2016 | 2016 | (3 | ) | |||||||||||
Davenport (Orlando), FL | 1,706,667 | 2016 | 2016 | (3 | ) | |||||||||||
Olathe (Kansas City), KS | 1,632,611 | 2016 | 2016 | (3 | ) | |||||||||||
Hamburg (Buffalo), NY | 1,700,000 | 2017 | 2017 | (3 | ) | |||||||||||
Ft. Myers, FL | 842,928 | 2017 | 2017 | (3 | ) | |||||||||||
Walker (Grand Rapids), MI | 1,062,332 | 2017 | 2017 | (3 | ) | |||||||||||
Mesquite (Dallas), TX | 1,398,488 | 2017 | 2017 | (3 | ) | |||||||||||
Aiken (Augusta, GA), SC | 630,703 | 2017 | 2017 | (3 | ) | |||||||||||
Homestead (Miami), FL | 1,072,000 | 2017 | 2017 | (3 | ) | |||||||||||
Oklahoma City, OK (Bunzl) | 252,684 | 2017 | 2017 | (3 | ) | |||||||||||
Concord (Charlotte), NC | 1,069,039 | 2017 | 2017 | (3 | ) | |||||||||||
Kenton, OH | 454,776 | 2017 | 2017 | (3 | ) | |||||||||||
Stow, OH | 448,829 | 2017 | 2017 | (3 | ) | |||||||||||
Charleston, SC (FDX) | 397,072 | 2017 | 2018 | (3 | ) | |||||||||||
Oklahoma City, OK (Amazon) | 603,861 | 2017 | 2018 | (3 | ) | |||||||||||
Savannah, GA | 882,410 | 2018 | 2018 | (3 | ) | |||||||||||
Daytona Beach, FL | 344,276 | 2018 | 2018 | (3 | ) | |||||||||||
Mobile, AL | 195,973 | 2018 | 2018 | (3 | ) | |||||||||||
Charleston, SC (FDX Ground) | 168,689 | 2018 | 2018 | (3 | ) | |||||||||||
Braselton (Atlanta), GA | 98,855 | 2018 | 2018 | (3 | ) | |||||||||||
Shopping Center | ||||||||||||||||
Somerset, NJ | 1,589,653 | 1970 | 1970 | (3 | ) | |||||||||||
Vacant Land | ||||||||||||||||
Shelby County, TN | -0- | N/A | 2007 | N/A | ||||||||||||
$ | 207,065,634 |
Column A | Column F | Column G | Column H | Column I | ||||||||||||
Accumulated | Date of | Date | Depreciable | |||||||||||||
Description | Depreciation | Construction | Acquired | Life | ||||||||||||
Ft. Mill (Charlotte, NC), SC | $ | 3,826 | 2010 | 2010 | (3 | ) | ||||||||||
Lebanon (Nashville), TN | 3,073 | 1993 | 2011 | (3 | ) | |||||||||||
Rockford, IL (Sherwin-Williams Co.) | 1,206 | 1998-2008 | 2011 | (3 | ) | |||||||||||
Edinburg, TX | 2,324 | 2011 | 2011 | (3 | ) | |||||||||||
Streetsboro (Cleveland), OH | 4,346 | 2012 | 2012 | (3 | ) | |||||||||||
Corpus Christi, TX | 1,176 | 2011 | 2012 | (3 | ) | |||||||||||
Halfmoon (Albany), NY | 1,134 | 2011 | 2012 | (3 | ) | |||||||||||
Lebanon (Cincinnati), OH | 1,069 | 2008 | 2012 | (3 | ) | |||||||||||
Olive Branch (Memphis, TN), MS (Anda Pharmaceuticals Inc.) | 3,261 | 2012 | 2012 | (3 | ) | |||||||||||
Oklahoma City, OK (FDX Ground) | 2,479 | 2012 | 2012 | (3 | ) | |||||||||||
Waco, TX | 2,363 | 2012 | 2012 | (3 | ) | |||||||||||
Livonia (Detroit), MI | 3,127 | 1999 | 2013 | (3 | ) | |||||||||||
Olive Branch (Memphis, TN), MS (Milwaukee Tool) | 6,697 | 2012 | 2012 | (3 | ) | |||||||||||
Roanoke, VA (FDX Ground) | 1,799 | 2013 | 2013 | (3 | ) | |||||||||||
Green Bay, WI | 1,227 | 2013 | 2014 | (3 | ) | |||||||||||
Stewartville (Rochester), MN | 888 | 2013 | 2013 | (3 | ) | |||||||||||
Tulsa, OK | 631 | 2009 | 2014 | (3 | ) | |||||||||||
Buckner (Louisville), KY | 5,039 | 2014 | 2014 | (3 | ) | |||||||||||
Edwardsville (Kansas City), KS (International Paper) | 3,245 | 2013 | 2014 | (3 | ) | |||||||||||
Altoona, PA | 1,595 | 2013 | 2014 | (3 | ) | |||||||||||
Spring (Houston), TX | 3,432 | 2013 | 2014 | (3 | ) | |||||||||||
Indianapolis, IN | 4,009 | 2014 | 2014 | (3 | ) | |||||||||||
Sauget (St. Louis, MO), IL | 2,391 | 2014 | 2015 | (3 | ) | |||||||||||
Lindale (Tyler), TX | 1,699 | 2014 | 2015 | (3 | ) | |||||||||||
Kansas City, MO | 1,670 | 2015 | 2015 | (3 | ) | |||||||||||
Frankfort (Lexington), KY | 4,582 | 2015 | 2015 | (3 | ) | |||||||||||
Jacksonville, FL (FDX Ground) | 4,305 | 2015 | 2015 | (3 | ) | |||||||||||
Monroe (Cincinnati), OH | 2,452 | 2015 | 2015 | (3 | ) | |||||||||||
Greenwood (Indianapolis), IN (ULTA) | 5,828 | 2015 | 2015 | (3 | ) | |||||||||||
Ft. Worth (Dallas), TX | 4,358 | 2015 | 2015 | (3 | ) | |||||||||||
Cincinnati, OH | 928 | 2015 | 2015 | (3 | ) | |||||||||||
Rockford, IL (Collins Aerospace Systems) | 829 | 2012 | 2015 | (3 | ) | |||||||||||
Concord (Charlotte), NC | 4,847 | 2015 | 2016 | (3 | ) | |||||||||||
Covington (New Orleans), LA | 2,352 | 2015 | 2016 | (3 | ) | |||||||||||
Imperial (Pittsburgh), PA | 2,331 | 2016 | 2016 | (3 | ) | |||||||||||
Burlington (Seattle/Everett), WA | 3,154 | 2015 | 2016 | (3 | ) | |||||||||||
Colorado Springs, CO | 3,744 | 2016 | 2016 | (3 | ) | |||||||||||
Louisville, KY | 1,328 | 2016 | 2016 | (3 | ) | |||||||||||
Davenport (Orlando), FL | 4,094 | 2016 | 2016 | (3 | ) | |||||||||||
Olathe (Kansas City), KS | 3,960 | 2016 | 2017 | (3 | ) | |||||||||||
Hamburg (Buffalo), NY | 4,313 | 2016 | 2017 | (3 | ) | |||||||||||
Ft. Myers, FL | 2,312 | 2017 | 2017 | (3 | ) | |||||||||||
Walker (Grand Rapids), MI | 3,187 | 2017 | 2017 | (3 | ) | |||||||||||
Mesquite (Dallas), TX | 4,755 | 2017 | 2017 | (3 | ) | |||||||||||
Aiken (Augusta, GA), SC | 2,144 | 2017 | 2017 | (3 | ) | |||||||||||
Homestead (Miami), FL | 3,656 | 2017 | 2017 | (3 | ) | |||||||||||
Oklahoma City, OK (Bunzl) | 859 | 2017 | 2017 | (3 | ) | |||||||||||
Concord (Charlotte), NC | 3,818 | 2017 | 2017 | (3 | ) | |||||||||||
Kenton, OH | 1,970 | 2017 | 2017 | (3 | ) | |||||||||||
Stow, OH | 1,795 | 2017 | 2017 | (3 | ) | |||||||||||
Charleston, SC (FDX) | 1,703 | 2017 | 2018 | (3 | ) | |||||||||||
Oklahoma City, OK (Amazon) | 2,778 | 2018 | 2018 | (3 | ) |
114 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 2021
(in thousands)
Column A | Column F | Column G | Column H | Column I | ||||||||||||
Accumulated | Date of | Date | Depreciable | |||||||||||||
Description | Depreciation | Construction | Acquired | Life | ||||||||||||
Savannah, GA (Shaw) | $ | 4,853 | 2018 | 2018 | (3 | ) | ||||||||||
Daytona Beach, FL | 2,454 | 2018 | 2018 | (3 | ) | |||||||||||
Mobile, AL | 2,548 | 2018 | 2018 | (3 | ) | |||||||||||
Charleston, SC (FDX Ground) | 3,205 | 2018 | 2018 | (3 | ) | |||||||||||
Braselton (Atlanta), GA | 3,659 | 2018 | 2018 | (3 | ) | |||||||||||
Trenton, NJ | 5,819 | 2017 | 2019 | (3 | ) | |||||||||||
Savannah, GA (FDX Ground) | 1,750 | 2019 | 2019 | (3 | ) | |||||||||||
Lafayette, IN | 1,238 | 2019 | 2019 | (3 | ) | |||||||||||
Greenwood (Indianapolis), IN (Amazon) | 3,822 | 2020 | 2020 | (3 | ) | |||||||||||
Lancaster (Columbus), OH | 638 | 2020 | 2020 | (3 | ) | |||||||||||
Whitsett (Greensboro), NC | 1,503 | 2020 | 2020 | (3 | ) | |||||||||||
Ogden (Salt Lake City), UT | 389 | 2020 | 2020 | (3 | ) | |||||||||||
Oklahoma City, OK (Amazon II) | 363 | 2020 | 2020 | (3 | ) | |||||||||||
Plain City (Columbus), OH | 1,254 | 2021 | 2021 | (3 | ) | |||||||||||
Locust Grove (Atlanta), GA | 1,607 | 2021 | 2021 | (3 | ) | |||||||||||
Burlington, VT | 197 | 2021 | 2021 | (3 | ) | |||||||||||
Kodak (Knoxville), TN | 66 | 2021 | 2021 | (3 | ) | |||||||||||
Shopping Center | ||||||||||||||||
Somerset, NJ | 1,873 | 1969 | 1970 | (3 | ) | |||||||||||
Vacant Land | ||||||||||||||||
Shelby County, TN | 0 | N/A | 2007 | N/A | ||||||||||||
$ | 345,988 |
(3) | Depreciation is computed based upon the following estimated lives: | |
Building: 31.5 to 39 years; Building Improvements: 3 to 39 years; Tenant Improvements: Lease Term |
Building: 31.5 to 39 years; Building Improvements: 3 to 39 years; Tenant Improvements: Lease Term
115 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
SCHEDULE III
SCHEDULE OF REAL ESTATE INVESTMENT
REAL ESTATE AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 20182021
(in thousands)
(1)Reconciliation
(1) | Reconciliation |
REAL ESTATE INVESTMENTS
9/30/2018 | 9/30/2017 | 9/30/2016 | 9/30/2021 | 9/30/2020 | 9/30/2019 | |||||||||||||||||||
Balance-Beginning of Year | $ | 1,431,916,534 | $ | 1,150,395,427 | $ | 920,143,937 | $ | 2,043,864 | $ | 1,866,518 | $ | 1,719,578 | ||||||||||||
Additions: | ||||||||||||||||||||||||
Acquisitions | 277,253,327 | 282,509,249 | 209,867,577 | 252,693 | 171,262 | 136,598 | ||||||||||||||||||
Improvements | 10,408,558 | 4,168,984 | 20,383,913 | 12,430 | 6,084 | 10,342 | ||||||||||||||||||
Total Additions | 287,661,885 | 286,678,233 | 230,251,490 | 265,123 | 177,346 | 146,940 | ||||||||||||||||||
Deletions: | ||||||||||||||||||||||||
Sales | -0- | (5,157,126 | ) | -0- | (5,297 | ) | 0 | 0 | ||||||||||||||||
Total Deletions | -0- | (5,157,126 | ) | -0- | (5,297 | ) | 0 | 0 | ||||||||||||||||
Balance-End of Year | $ | 1,719,578,419 | $ | 1,431,916,534 | $ | 1,150,395,427 | $ | 2,303,690 | $ | 2,043,864 | $ | 1,866,518 |
ACCUMULATED DEPRECIATION
SCHEDULE OF ACCUMULATED DEPRECIATION
9/30/2018 | 9/30/2017 | 9/30/2016 | ||||||||||
Balance-Beginning of Year | $ | 171,086,083 | $ | 143,006,233 | $ | 119,545,674 | ||||||
Depreciation | 36,017,959 | 29,015,821 | 23,460,559 | |||||||||
Sales | (38,408 | ) | (935,971 | ) | -0- | |||||||
Balance-End of Year | $ | 207,065,634 | $ | 171,086,083 | $ | 143,006,233 |
9/30/2021 | 9/30/2020 | 9/30/2019 | ||||||||||
Balance-Beginning of Year | $ | 296,020 | $ | 249,584 | $ | 207,065 | ||||||
Depreciation | 51,250 | 46,436 | 42,519 | |||||||||
Sales | (1,282 | ) | 0 | 0 | ||||||||
Balance-End of Year | $ | 345,988 | $ | 296,020 | $ | 249,584 |
116 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO SCHEDULE III
SEPTEMBER 30, 20182021
(1)Reconciliation(in thousands)
2018 | 2017 | 2016 | ||||||||||
Balance – Beginning of Year | $ | 1,431,916,534 | $ | 1,150,395,427 | $ | 920,143,937 | ||||||
Additions: | ||||||||||||
Somerset, NJ | $ | 38,887 | -0- | 377,637 | ||||||||
Monaca (Pittsburgh), PA | 24,825 | 79,618 | 37,255 | |||||||||
Ridgeland (Jackson), MS | 26,663 | -0- | 7,797 | |||||||||
Urbandale (Des Moines), IA | 267,031 | 94,717 | -0- | |||||||||
Richland (Jackson), MS | -0- | -0- | -0- | |||||||||
O’Fallon (St. Louis), MO | -0- | -0- | -0- | |||||||||
Fayetteville, NC | -0- | 9,753 | 557,354 | |||||||||
Schaumburg (Chicago), IL | -0- | 196,526 | 13,775 | |||||||||
Burr Ridge (Chicago), IL | -0- | -0- | 8,700 | |||||||||
Romulus (Detroit), MI | 65,165 | 66,974 | -0- | |||||||||
Liberty (Kansas City), MO | -0- | -0- | 24,263 | |||||||||
Omaha, NE | -0- | -0- | 7,410 | |||||||||
Charlottesville, VA | 98,714 | 8,489 | 4,462 | |||||||||
Jacksonville, FL (FDX) | 67,174 | 83,383 | 16,983 | |||||||||
West Chester Twp. (Cincinnati), OH | -0- | 4,996 | -0- | |||||||||
Mechanicsville (Richmond), VA | 7,384 | 26,830 | 18,510 | |||||||||
St. Joseph, MO | 74,378 | 55,564 | 50,934 | |||||||||
Newington (Hartford), CT | -0- | 30,284 | -0- | |||||||||
Cudahy (Milwaukee), WI | 384,000 | -0- | 8,689 | |||||||||
Beltsville (Washington, DC), MD | -0- | -0- | 44,600 | |||||||||
Carlstadt (New York, NY), NJ | 38,813 | -0- | 13,877 | |||||||||
Granite City (St. Louis, MO), IL | -0- | 155,034 | 156,139 | |||||||||
Winston-Salem, NC | 7,713 | -0- | 316,527 | |||||||||
Elgin (Chicago), IL | -0- | 44,526 | 5,960 | |||||||||
Cheektowaga (Buffalo), NY | -0- | -0- | -0- | |||||||||
Tolleson (Phoenix), AZ | -0- | -0- | 1,655,640 | |||||||||
Edwardsville (Kansas City), KS (Carlisle Tire) | -0- | 7,585 | -0- | |||||||||
Wheeling (Chicago), IL | 444,822 | -0- | -0- | |||||||||
Richmond, VA | -0- | -0- | 7,540 | |||||||||
Tampa, FL (FDX Ground) | 5,348 | 125 | 1,247,140 | |||||||||
Montgomery (Chicago), IL | 4,950 | -0- | -0- | |||||||||
Denver, CO | -0- | -0- | -0- | |||||||||
Hanahan (Charleston), SC (SAIC) | 35,661 | 33,849 | 40,000 | |||||||||
Hanahan (Charleston), SC (FDX Ground) | -0- | -0- | -0- | |||||||||
Augusta, GA (FDX Ground) | -0- | 9,270 | 25,161 | |||||||||
Tampa, FL (Tampa Bay Grand Prix) | -0- | -0- | 26,916 | |||||||||
Huntsville, AL | -0- | 56,688 | 1,853,390 | |||||||||
Augusta, GA (FDX) | -0- | 6,047 | 24,700 | |||||||||
Lakeland, FL | 60,694 | -0- | 16,321 | |||||||||
El Paso, TX | -0- | -0- | -0- | |||||||||
Richfield (Cleveland), OH | 11,700 | -0- | -0- | |||||||||
Colorado Springs, CO (A) | -0- | -0- | 9,357 | |||||||||
Tampa, FL (FDX) | 237,196 | 27,063 | 27,144 | |||||||||
Griffin (Atlanta), GA | 64,826 | -0- | -0- | |||||||||
Roanoke, VA (CHEP USA) | 58,225 | -0- | -0- | |||||||||
Orion, MI | 4,488 | -0- | 5,867 | |||||||||
Chattanooga, TN | 122,022 | 4,315 | 41,042 | |||||||||
Bedford Heights (Cleveland), OH | -0- | 55,957 | 84,288 | |||||||||
Punta Gorda, FL | -0- | 20,245 | 8,350 | |||||||||
Cocoa, FL | -0- | -0- | 37,606 | |||||||||
Orlando, FL | 220,092 | -0- | 13,195 | |||||||||
Topeka, KS | -0- | -0- | -0- | |||||||||
Memphis, TN | (6,950 | ) | 1,050 | -0- | ||||||||
Houston, TX | 14,820 | 65,351 | -0- | |||||||||
Carrollton (Dallas), TX | -0- | 50,097 | 24,806 | |||||||||
Ft. Mill (Charlotte, NC), SC | 1,660,729 | -0- | -0- | |||||||||
Lebanon (Nashville), TN | -0- | -0- | -0- | |||||||||
Rockford, IL (Sherwin-Williams Co.) | -0- | -0- | -0- | |||||||||
Edinburg, TX | -0- | 615,142 | 3,985,389 |
(1) | Reconciliation |
RECONCILIATION OF REAL ESTATE AND ACCUMULATED DEPRECIATION
2021 | 2020 | 2019 | ||||||||||
Balance – Beginning of Year | $ | 2,043,864 | $ | 1,866,518 | $ | 1,719,578 | ||||||
Additions: | ||||||||||||
Monaca (Pittsburgh), PA | $ | 11 | $ | 42 | $ | 0 | ||||||
Ridgeland (Jackson), MS | 220 | 425 | 426 | |||||||||
Urbandale (Des Moines), IA | 0 | 0 | 20 | |||||||||
Richland (Jackson), MS | 0 | 0 | 0 | |||||||||
O’Fallon (St. Louis), MO | 0 | 0 | 4 | |||||||||
Fayetteville, NC | 3 | 0 | 4 | |||||||||
Schaumburg (Chicago), IL | 0 | 269 | 0 | |||||||||
Burr Ridge (Chicago), IL | 178 | 0 | 14 | |||||||||
Romulus (Detroit), MI | 0 | 0 | 217 | |||||||||
Liberty (Kansas City), MO | 0 | 262 | 137 | |||||||||
Omaha, NE | 0 | 0 | 19 | |||||||||
Charlottesville, VA | 0 | 0 | 6 | |||||||||
Jacksonville, FL (FDX) | 0 | 0 | 187 | |||||||||
West Chester Twp. (Cincinnati), OH | 0 | 0 | 0 | |||||||||
Mechanicsville (Richmond), VA | 9 | 21 | 14 | |||||||||
St. Joseph, MO | 106 | 10 | 25 | |||||||||
Newington (Hartford), CT | 19 | 13 | 0 | |||||||||
Cudahy (Milwaukee), WI | 8 | 0 | 41 | |||||||||
Beltsville (Washington, DC), MD | 208 | 0 | 0 | |||||||||
Carlstadt (New York, NY), NJ | 0 | 0 | 354 | |||||||||
Granite City (St. Louis, MO), IL | 60 | 0 | 0 | |||||||||
Winston-Salem, NC | 163 | 17 | 0 | |||||||||
Elgin (Chicago), IL | 3 | 204 | 0 | |||||||||
Cheektowaga (Buffalo), NY | 0 | 0 | 0 | |||||||||
Tolleson (Phoenix), AZ | 0 | 0 | 0 | |||||||||
Edwardsville (Kansas City), KS (Carlstar) | 0 | 50 | 0 | |||||||||
Wheeling (Chicago), IL | 632 | 0 | 10 | |||||||||
Richmond, VA | 7 | 184 | 138 | |||||||||
Tampa, FL (FDX Ground) | 0 | 44 | 0 | |||||||||
Montgomery (Chicago), IL | 0 | 0 | 0 | |||||||||
Denver, CO | 0 | 10 | 10 | |||||||||
Hanahan (Charleston), SC (SAIC) | 0 | 447 | 606 | |||||||||
Hanahan (Charleston), SC (Amazon) | 3 | 1,613 | 75 | |||||||||
Augusta, GA (FDX Ground) | 0 | 0 | 0 | |||||||||
Tampa, FL (Tampa Bay Grand Prix) | 0 | 0 | 0 | |||||||||
Huntsville, AL | 0 | 0 | 0 | |||||||||
Augusta, GA (FDX) | 9 | 0 | 6 | |||||||||
Lakeland, FL | 0 | 0 | 0 | |||||||||
El Paso, TX | 0 | 0 | 0 | |||||||||
Richfield (Cleveland), OH | 190 | 0 | 0 | |||||||||
Tampa, FL (FDX) | 447 | 36 | 8 | |||||||||
Griffin (Atlanta), GA | 0 | 7 | 142 | |||||||||
Roanoke, VA (CHEP USA) | 8 | 0 | 0 | |||||||||
Orion, MI | 215 | 51 | 0 | |||||||||
Chattanooga, TN | 0 | 20 | 210 | |||||||||
Bedford Heights (Cleveland), OH | 0 | 6 | 378 | |||||||||
Punta Gorda, FL | 0 | 0 | 0 | |||||||||
Cocoa, FL | 0 | 0 | 0 | |||||||||
Orlando, FL | 0 | 36 | 0 | |||||||||
Topeka, KS | 0 | 0 | 0 | |||||||||
Memphis, TN | 0 | (21 | ) | 1,499 | ||||||||
Houston, TX | 30 | 28 | 0 | |||||||||
Carrollton (Dallas), TX | 2 | 548 | 128 |
117 |
MONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO SCHEDULE III, (CONT’D)
SEPTEMBER 30, 20182021
(in thousands)
(1)Reconciliation (cont’d)
2018 | 2017 | 2016 | ||||||||||
Streetsboro (Cleveland), OH | $ | -0- | $ | -0- | $ | -0- | ||||||
Corpus Christi, TX | 36,417 | 7,413 | -0- | |||||||||
Halfmoon (Albany), NY | -0- | -0- | -0- | |||||||||
Lebanon (Cincinnati), OH | -0- | -0- | -0- | |||||||||
Olive Branch (Memphis, TN), MS (Anda Pharmaceuticals) | -0- | -0- | -0- | |||||||||
Oklahoma City, OK (FDX Ground) | -0- | 4,200 | (13,611 | ) | ||||||||
Waco, TX | -0- | 5,210 | -0- | |||||||||
Livonia (Detroit), MI | -0- | -0- | 31,497 | |||||||||
Olive Branch (Memphis, TN), MS (Milwaukee Tool) | -0- | -0- | 9,412,120 | |||||||||
Roanoke, VA (FDX Ground) | -0- | -0- | -0- | |||||||||
Green Bay, WI | -0- | -0- | -0- | |||||||||
Stewartville (Rochester), MN | -0- | -0- | -0- | |||||||||
Tulsa, OK | -0- | -0- | -0- | |||||||||
Buckner (Louisville), KY | -0- | 40,000 | 48,136 | |||||||||
Edwardsville (Kansas City), KS (International Paper) | -0- | -0- | 5,355 | |||||||||
Altoona, PA | 14,316 | -0- | 18,650 | |||||||||
Spring (Houston), TX | 10,598 | -0- | 56,275 | |||||||||
Indianapolis, IN | 497,710 | 1,060,372 | -0- | |||||||||
Sauget (St. Louis, MO), IL | -0- | -0- | 4,950 | |||||||||
Lindale (Tyler), TX | 29,050 | 6,500 | -0- | |||||||||
Kansas City, MO | 329,024 | 51,226 | -0- | |||||||||
Frankfort (Lexington), KY | -0- | -0- | -0- | |||||||||
Jacksonville, FL (FDX Ground) | 3,612 | 86,136 | -0- | |||||||||
Monroe (Cincinnati), OH | 4,587,760 | -0- | -0- | |||||||||
Greenwood (Indianapolis), IN | -0- | 11,680 | 15,817 | |||||||||
Ft. Worth (Dallas), TX | -0- | -0- | -0- | |||||||||
Cincinnati, OH | -0- | -0- | -0- | |||||||||
Rockford, IL (Collins Aerospace Systems) | -0- | -0- | -0- | |||||||||
Concord (Charlotte), NC | -0- | 1,068,900 | 31,975,897 | |||||||||
Covington (New Orleans), LA | -0- | -0- | 18,410,000 | |||||||||
Imperial (Pittsburgh), PA | -0- | -0- | 19,950,000 | |||||||||
Burlington (Seattle/Everett), WA | -0- | 17,867 | 30,210,680 | |||||||||
Colorado Springs, CO | 820,066 | -0- | 28,500,000 | |||||||||
Louisville, KY | -0- | -0- | 11,304,000 | |||||||||
Davenport (Orlando), FL | -0- | -0- | 37,780,000 | |||||||||
Olathe (Kansas City), KS | -0- | -0- | 31,737,000 | |||||||||
Hamburg (Buffalo), NY | -0- | 34,850,000 | -0- | |||||||||
Ft. Myers, FL | 40,635 | 21,623,000 | -0- | |||||||||
Walker (Grand Rapids), MI | -0- | 31,654,985 | -0- | |||||||||
Mesquite (Dallas), TX | -0- | 49,880,493 | -0- | |||||||||
Aiken (Augusta, GA), SC | -0- | 21,040,396 | -0- | |||||||||
Homestead (Miami), FL | -0- | 37,873,120 | -0- | |||||||||
Oklahoma City, OK (Bunzl) | -0- | 8,728,439 | -0- | |||||||||
Concord (Charlotte), NC | -0- | 40,043,145 | -0- | |||||||||
Kenton, OH | -0- | 17,881,608 | -0- | |||||||||
Stow, OH | -0- | 18,934,065 | -0- | |||||||||
Charleston, SC (FDX) | 21,519,411 | -0- | -0- | |||||||||
Oklahoma City, OK (Amazon) | 29,878,942 | -0- | -0- | |||||||||
Savannah, GA | 56,025,945 | -0- | -0- | |||||||||
Daytona Beach, FL | 29,973,199 | -0- | -0- | |||||||||
Mobile, AL | 33,052,316 | -0- | -0- | |||||||||
Charleston, SC (FDX Ground) | 46,576,380 | -0- | -0- | |||||||||
Braselton (Atlanta), GA | 60,227,134 | -0- | -0- | |||||||||
Total Additions | $ | 287,661,885 | $ | 286,678,233 | $ | 230,251,490 | ||||||
Total Disposals | -0- | (5,157,126 | ) | -0- | ||||||||
Balance – End of Year | $ | 1,719,578,419 | $ | 1,431,916,534 | $ | 1,150,395,427 |
2021 | 2020 | 2019 | ||||||||||
Ft. Mill (Charlotte, NC), SC | $ | 0 | $ | 0 | $ | (10 | ) | |||||
Lebanon (Nashville), TN | 0 | 0 | 0 | |||||||||
Rockford, IL (Sherwin-Williams Co.) | 0 | 0 | 0 | |||||||||
Edinburg, TX | 0 | 0 | 0 | |||||||||
Streetsboro (Cleveland), OH | 0 | 0 | 0 | |||||||||
Corpus Christi, TX | 0 | 0 | 0 | |||||||||
Halfmoon (Albany), NY | 1,014 | 202 | 0 | |||||||||
Lebanon (Cincinnati), OH | 0 | 102 | 0 | |||||||||
Olive Branch (Memphis, TN), MS (Anda Pharmaceuticals) | 0 | 0 | 0 | |||||||||
Oklahoma City, OK (FDX Ground) | 0 | 19 | 21 | |||||||||
Waco, TX | 0 | 0 | 0 | |||||||||
Livonia (Detroit), MI | 8 | 0 | 118 | |||||||||
Olive Branch (Memphis, TN), MS (Milwaukee Tool) | 0 | 0 | 0 | |||||||||
Roanoke, VA (FDX Ground) | 0 | 0 | 0 | |||||||||
Green Bay, WI | 10 | 0 | 0 | |||||||||
Stewartville (Rochester), MN | 8 | 0 | 4 | |||||||||
Tulsa, OK | 0 | 0 | 0 | |||||||||
Buckner (Louisville), KY | 0 | 0 | 0 | |||||||||
Edwardsville (Kansas City), KS (International Paper) | 0 | 0 | 0 | |||||||||
Altoona, PA | 0 | (4 | ) | 4 | ||||||||
Spring (Houston), TX | 0 | 12 | 22 | |||||||||
Indianapolis, IN | 0 | 0 | 0 | |||||||||
Sauget (St. Louis, MO), IL | 2,204 | 0 | 0 | |||||||||
Lindale (Tyler), TX | 2,338 | 0 | 0 | |||||||||
Kansas City, MO | 0 | 0 | 23 | |||||||||
Frankfort (Lexington), KY | 0 | 0 | 0 | |||||||||
Jacksonville, FL (FDX Groun d) | 0 | 99 | 91 | |||||||||
Monroe (Cincinnati), OH | 0 | 0 | 4,052 | |||||||||
Greenwood (Indianapolis), IN (ULTA) | 8 | 253 | 0 | |||||||||
Ft. Worth (Dallas), TX | 29 | 287 | 32 | |||||||||
Cincinnati, OH | 0 | 0 | 0 | |||||||||
Rockford, IL (Collins Aerospace Systems) | 0 | 0 | 0 | |||||||||
Concord (Charlotte), NC | 0 | 9 | 0 | |||||||||
Covington (New Orleans), LA | 0 | 0 | 16 | |||||||||
Imperial (Pittsburgh), PA | 26 | 0 | 14 | |||||||||
Burlington (Seattle/Everett), WA | 0 | 49 | 92 | |||||||||
Colorado Springs, CO | 0 | 0 | 0 | |||||||||
Louisville, KY | 0 | 0 | 0 | |||||||||
Davenport (Orlando), FL | 3 | 304 | 0 | |||||||||
Olathe (Kansas City), KS | 3,621 | 89 | 0 | |||||||||
Hamburg (Buffalo), NY | 8 | 38 | 244 | |||||||||
Ft. Myers, FL | 0 | 21 | 0 | |||||||||
Walker (Grand Rapids), MI | 0 | 0 | 0 | |||||||||
Mesquite (Dallas), TX | 0 | 0 | 0 | |||||||||
Aiken (Augusta, GA), SC | 0 | 0 | 0 | |||||||||
Homestead (Miami), FL | 0 | 0 | 38 | |||||||||
Oklahoma City, OK (Bunzl) | 0 | 0 | 0 | |||||||||
Concord (Charlotte), NC | 0 | 0 | 0 | |||||||||
Kenton, OH | 0 | 0 | 849 | |||||||||
Stow, OH | 0 | 0 | 0 | |||||||||
Charleston, SC (FDX) | 19 | 0 | 0 | |||||||||
Oklahoma City, OK (Amazon) | 0 | 0 | 0 |
118 |
SIGNATURESMONMOUTH REAL ESTATE INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO SCHEDULE III, (CONT’D)
SEPTEMBER 30, 2021
(in thousands)
(1) | Reconciliation (cont’d) |
2021 | 2020 | 2019 | ||||||||||
Savannah, GA (Shaw) | $ | 0 | $ | 0 | $ | 0 | ||||||
Daytona Beach, FL | 593 | 272 | 35 | |||||||||
Mobile, AL | 0 | 0 | 0 | |||||||||
Charleston, SC (FDX Ground) | 0 | 0 | 0 | |||||||||
Braselton (Atlanta), GA | 10 | 0 | 0 | |||||||||
Trenton, NJ | 0 | 0 | 83,988 | |||||||||
Savannah, GA (FDX Ground) | 0 | 0 | 27,532 | |||||||||
Lafayette, IN | 0 | 0 | 25,079 | |||||||||
Greenwood (Indianapolis), IN (Amazon) | 0 | 79,364 | 0 | |||||||||
Lancaster (Columbus), OH | 0 | 17,558 | 0 | |||||||||
Whitsett (Greensboro), NC | 0 | 46,711 | 0 | |||||||||
Ogden (Salt Lake City), UT | 0 | 12,667 | 0 | |||||||||
Oklahoma City, OK (Amazon II) | 0 | 14,963 | 0 | |||||||||
Plain City (Columbus), OH | 71,742 | 0 | 0 | |||||||||
Locust Grove (Atlanta), GA | 93,236 | 0 | 0 | |||||||||
Burlington, VT | 53,825 | 0 | 0 | |||||||||
Kodak (Knoxville), TN | 33,890 | 0 | 0 | |||||||||
Shopping Center | ||||||||||||
Somerset, NJ | 0 | 9 | 18 | |||||||||
Total Additions | $ | 265,123 | $ | 177,346 | $ | 146,940 | ||||||
Total Disposals | (5,297 | ) | 0 | 0 | ||||||||
Balance – End of Year | $ | 2,303,690 | $ | 2,043,864 | $ | 1,866,518 |
119 |
SIGNATURES
Pursuant to the requirements of Section 13 of 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
MONMOUTH REAL ESTATE INVESTMENT | ||
CORPORATION | ||
(registrant) | ||
Date: November | By: | /s/ Michael P. Landy |
Michael P. Landy, President, Chief Executive | ||
Officer and Director, its principal executive officer | ||
Date: November | By: | /s/ Kevin S. Miller |
Kevin S. Miller, Chief Financial Officer, its principal | ||
financial officer and principal accounting officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Date: November | By: | /s/ Eugene W. Landy |
Eugene W. Landy, Chairman of the Board and Director | ||
Date: November | By: | /s/ Michael P. Landy |
Michael P. Landy, President, Chief Executive Officer and Director | ||
Date: November | By: | /s/ Kevin S. Miller |
Kevin S. Miller, Chief Financial Officer and Director | ||
Date: November | By: | /s/ Kiernan Conway |
Kiernan Conway, Director | ||
Date: November | By: | /s/ Daniel D. Cronheim |
Daniel D. Cronheim, Director | ||
Date: November | By: | /s/ Catherine B. Elflein |
Catherine B. Elflein, Director | ||
Date: November | By: | /s/ Brian H. Haimm |
Brian H. Haimm, Director | ||
Date: November | By: | /s/ Neal Herstik |
Neal Herstik, Director | ||
Date: November | By: | /s/ Matthew I. Hirsch |
Matthew I. Hirsch, Director |
Date: November | By: | /s/ Samuel A. Landy |
Samuel A. Landy, Director | ||
Date: November | By: | /s/ Gregory T. Otto |
Gregory T. Otto, Director | ||
Date: November | By: | /s/ Sonal Pande |
Sonal Pande, Director | ||
Date: November 12, 2021 | By: | /s/ Scott L. Robinson |
Scott L. Robinson, Director | ||
120 |