Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 31, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-40814 | |
Entity Registrant Name | MODIV INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 47-4156046 | |
Entity Address, Address Line One | 120 Newport Center Drive | |
Entity Address, City or Town | Newport Beach | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92660 | |
City Area Code | 888 | |
Local Phone Number | 686-6348 | |
Title of 12(b) Security | 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value per share | |
Trading Symbol | MDVA | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001645873 | |
Current Fiscal Year End Date | --12-31 | |
Class C | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 7,394,256 | |
Class S | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 63,618 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Real estate investments: | ||
Land | $ 67,340,810 | $ 65,358,321 |
Buildings and improvements | 280,284,086 | 272,397,472 |
Tenant origination and absorption costs | 23,784,332 | 23,792,057 |
Total investments in real estate property | 371,409,228 | 361,547,850 |
Accumulated depreciation and amortization | (41,720,011) | (32,091,211) |
Total investments in real estate property, net | 329,689,217 | 329,456,639 |
Investment in unconsolidated entity | 9,977,144 | 10,002,368 |
Total real estate investments, net | 339,666,361 | 339,459,007 |
Real estate investments held for sale, net | 0 | 24,585,739 |
Total real estate investments | 339,666,361 | 364,044,746 |
Cash and cash equivalents | 52,299,936 | 8,248,412 |
Restricted cash | 2,410,951 | 129,118 |
Receivable from early termination of lease and sale of real estate property, respectively | 1,966,767 | 1,824,383 |
Tenant receivables | 7,346,948 | 6,665,790 |
Above-market lease intangibles, net | 723,475 | 820,842 |
Prepaid expenses and other assets | 4,779,024 | 2,171,717 |
Other assets related to real estate investments held for sale | 0 | 1,079,361 |
Goodwill, net | 17,320,857 | 17,320,857 |
Intangible assets, net | 3,926,009 | 5,127,788 |
Total assets | 430,440,328 | 407,433,014 |
Liabilities and Equity | ||
Mortgage notes payable, net | 180,914,339 | 175,925,918 |
Mortgage notes payable related to real estate investments held for sale, net | 0 | 9,088,438 |
Total mortgage notes payable, net | 180,914,339 | 185,014,356 |
Credit facility, net | 0 | 5,978,276 |
Economic relief note payable | 0 | 517,000 |
Accounts payable, accrued and other liabilities | 9,913,473 | 7,579,624 |
Share repurchases payable | 1,348,911 | 2,980,559 |
Below-market lease intangibles, net | 11,466,014 | 12,565,737 |
Interest rate swap derivatives | 1,073,998 | 1,743,889 |
Other liabilities related to real estate investments held for sale | 0 | 801,337 |
Total liabilities | 204,716,735 | 217,180,778 |
Commitments and contingencies (Note 11) | ||
Redeemable common stock | 750,000 | 7,365,568 |
7.375% Series A cumulative redeemable perpetual preferred stock, $0.001 par value, 2,000,000 and no shares authorized, 2,000,000 and no shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively (Note 9) | 2,000 | 0 |
Additional paid-in-capital | 270,724,156 | 224,288,417 |
Cumulative distributions and net losses | (96,363,037) | (92,012,686) |
Total Modiv Inc. equity | 174,370,593 | 132,283,668 |
Noncontrolling interests in the Operating Partnership | 50,603,000 | 50,603,000 |
Total equity | 224,973,593 | 182,886,668 |
Total liabilities and equity | 430,440,328 | 407,433,014 |
Class C common stock | ||
Liabilities and Equity | ||
Common stock, value issued | 7,410 | 7,874 |
Class S common stock | ||
Liabilities and Equity | ||
Common stock, value issued | $ 64 | $ 63 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Rental income | $ 10,307,683 | $ 9,557,191 | $ 28,521,546 | $ 29,888,620 |
Expenses: | ||||
General and administrative | 3,674,187 | 2,522,719 | 9,832,940 | 7,447,082 |
Depreciation and amortization | 3,814,503 | 4,304,470 | 11,817,529 | 13,420,256 |
Interest expense | 1,831,545 | 2,732,528 | 5,711,330 | 9,196,061 |
Property expenses | 1,658,437 | 1,677,055 | 5,111,270 | 5,480,411 |
Impairment of real estate investment properties | 0 | 0 | (400,999) | 9,506,525 |
Impairment of goodwill and intangible assets | 0 | 0 | 0 | 34,572,403 |
Reserve for loan guarantee | 0 | (4,359) | 0 | 3,120,678 |
Total expenses | 10,978,672 | 11,232,413 | 32,072,070 | 82,743,416 |
Other operating income: | ||||
Gain on sale of real estate investments | 4,242,771 | 1,693,642 | 4,532,413 | 1,693,642 |
Real estate operating income (loss) | 3,571,782 | 18,420 | 981,889 | (51,161,154) |
Other income (loss): | ||||
Lease termination (expense) income | 0 | (1,175,192) | 0 | (1,175,192) |
Interest income | 1,270 | 51 | 1,370 | 4,873 |
Income from investment in unconsolidated entity | 75,403 | 92,617 | 222,705 | 239,028 |
Gain on forgiveness of economic relief note payable | 0 | 0 | 517,000 | 0 |
Other | 0 | 0 | 20,000 | (4,855) |
Total other income (loss) | 76,673 | (1,082,524) | 761,075 | (936,146) |
Net income (loss) | 3,648,455 | (1,064,104) | 1,742,964 | (52,097,300) |
Preferred stock dividends | (143,403) | 0 | (143,403) | 0 |
Net income (loss) attributable to common stockholders, basic | 3,505,052 | (1,064,104) | 1,599,561 | (52,097,300) |
Net income (loss) attributable to common stockholders, diluted | $ 3,505,052 | $ (1,064,104) | $ 1,599,561 | $ (52,097,300) |
Net income (loss) per share attributable to common stockholders (Note 2) | ||||
Basic | $ 0.47 | $ (0.13) | $ 0.21 | $ (6.50) |
Diluted | $ 0.40 | $ (0.13) | $ 0.18 | $ (6.50) |
Weighted-average number of common shares outstanding | ||||
Basic | 7,531,559 | 8,075,070 | 7,575,013 | 8,019,742 |
Diluted | 8,750,875 | 8,075,070 | 8,763,112 | 8,019,742 |
Distributions declared per common share | $ 0.2625 | $ 0.4080 | $ 0.7875 | $ 0.9330 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Equity - USD ($) | Total | Series A Preferred Stock | Common Class C and S | Preferred Stock | Preferred StockSeries A Preferred Stock | Common StockClass C | Common StockClass S | Additional Paid-in Capital | Additional Paid-in CapitalSeries A Preferred Stock | Additional Paid-in CapitalCommon Class C and S | Cumulative Distributions and Net Losses | Cumulative Distributions and Net LossesCommon Class C and S | Total Stockholders' Equity | Total Stockholders' EquitySeries A Preferred Stock | Total Stockholders' EquityCommon Class C and S | Noncontrolling Interests in the Operating Partnership |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 7,882,489 | 62,202 | |||||||||||||
Beginning balance at Dec. 31, 2019 | $ 240,172,562 | $ 0 | $ 7,882 | $ 62 | $ 220,730,566 | $ (31,168,948) | $ 189,569,562 | $ 50,603,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of common stock (in shares) | 585,853 | 1,252 | ||||||||||||||
Issuance of common stock | $ 16,193,927 | $ 586 | $ 1 | $ 16,193,340 | $ 0 | $ 16,193,927 | ||||||||||
Issuance of preferred stock (in shares) | 585,853 | 1,252 | ||||||||||||||
Issuance of preferred stock, net | 16,193,927 | $ 586 | $ 1 | 16,193,340 | $ 0 | 16,193,927 | ||||||||||
Stock compensation expense (in shares) | 12,977 | |||||||||||||||
Stock compensation expense | 313,334 | $ 13 | 313,321 | 313,334 | ||||||||||||
Class OP Units compensation expense | 266,350 | 266,350 | 266,350 | |||||||||||||
Offering costs | (981,748) | (981,748) | (981,748) | |||||||||||||
Reclassification to redeemable common stock | 4,393,863 | 4,393,863 | 4,393,863 | |||||||||||||
Repurchase of common stock (in shares) | (478,614) | (645) | ||||||||||||||
Repurchase of common stock | (13,154,123) | $ (478) | $ 0 | (13,153,645) | 0 | (13,154,123) | ||||||||||
Distributions declared, common stock | (9,595,208) | (9,595,208) | (9,595,208) | |||||||||||||
Net income (loss) attributable to common stockholders | (52,097,300) | (52,097,300) | (52,097,300) | |||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 0 | 8,002,705 | 62,808 | |||||||||||||
Ending balance at Sep. 30, 2020 | 185,511,657 | $ 0 | $ 8,003 | $ 63 | 227,762,047 | (92,861,456) | 134,908,657 | 50,603,000 | ||||||||
Beginning balance (in shares) at Jun. 30, 2020 | 0 | 8,045,711 | 62,550 | |||||||||||||
Beginning balance at Jun. 30, 2020 | 189,662,529 | $ 0 | $ 8,046 | $ 63 | 228,712,957 | (89,661,537) | 139,059,529 | 50,603,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of common stock (in shares) | 99,810 | 259 | ||||||||||||||
Issuance of common stock | 2,101,688 | $ 100 | $ 0 | 2,101,588 | 2,101,688 | |||||||||||
Issuance of preferred stock (in shares) | 99,810 | 259 | ||||||||||||||
Issuance of preferred stock, net | 2,101,688 | $ 100 | $ 0 | 2,101,588 | 2,101,688 | |||||||||||
Stock compensation expense (in shares) | 8,750 | |||||||||||||||
Stock compensation expense | 183,750 | $ 9 | 183,741 | 183,750 | ||||||||||||
Class OP Units compensation expense | 88,784 | 88,784 | 88,784 | |||||||||||||
Offering costs | (158,826) | (158,826) | (158,826) | |||||||||||||
Repurchase of common stock (in shares) | (151,567) | 0 | ||||||||||||||
Repurchase of common stock | (3,166,349) | $ (152) | $ 0 | (3,166,197) | (3,166,349) | |||||||||||
Distributions declared, common stock | (2,135,815) | (2,135,815) | (2,135,815) | |||||||||||||
Net income (loss) attributable to common stockholders | (1,064,104) | (1,064,104) | (1,064,104) | |||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 0 | 8,002,705 | 62,808 | |||||||||||||
Ending balance at Sep. 30, 2020 | 185,511,657 | $ 0 | $ 8,003 | $ 63 | 227,762,047 | (92,861,456) | 134,908,657 | 50,603,000 | ||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 0 | 7,874,541 | 62,860 | |||||||||||||
Beginning balance at Dec. 31, 2020 | 182,886,668 | $ 0 | $ 7,874 | $ 63 | 224,288,417 | (92,012,686) | 132,283,668 | 50,603,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of common stock (in shares) | 2,000,000 | 271,061 | 688 | |||||||||||||
Issuance of common stock | $ 47,570,374 | 6,311,475 | $ 2,000 | $ 271 | $ 1 | $ 47,568,374 | 6,311,203 | $ 47,570,374 | 6,311,475 | |||||||
Issuance of preferred stock (in shares) | 2,000,000 | 271,061 | 688 | |||||||||||||
Issuance of preferred stock, net | 47,570,374 | 6,311,475 | $ 2,000 | $ 271 | $ 1 | 47,568,374 | 6,311,203 | 47,570,374 | 6,311,475 | |||||||
Stock compensation expense (in shares) | 12,168 | |||||||||||||||
Stock compensation expense | 296,250 | $ 13 | 296,237 | 296,250 | ||||||||||||
Class OP Units compensation expense | 1,840,341 | 1,840,341 | 1,840,341 | |||||||||||||
Offering costs | (946,914) | (946,914) | (946,914) | |||||||||||||
Reclassification to redeemable common stock | 8,247,216 | 8,247,216 | 8,247,216 | |||||||||||||
Repurchase of common stock (in shares) | (747,841) | |||||||||||||||
Repurchase of common stock | (16,881,466) | $ (748) | (16,880,718) | (16,881,466) | ||||||||||||
Distributions declared, common stock | (5,949,912) | (143,403) | (5,949,912) | (5,949,912) | ||||||||||||
Net income (loss) attributable to common stockholders | 1,599,561 | 1,599,561 | 1,599,561 | |||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 2,000,000 | 7,409,929 | 63,548 | |||||||||||||
Ending balance at Sep. 30, 2021 | 224,973,593 | $ 2,000 | $ 7,410 | $ 64 | 270,724,156 | (96,363,037) | 174,370,593 | 50,603,000 | ||||||||
Beginning balance (in shares) at Jun. 30, 2021 | 0 | 7,490,414 | 63,331 | |||||||||||||
Beginning balance at Jun. 30, 2021 | 168,041,287 | $ 0 | $ 7,490 | $ 63 | 215,317,098 | (97,886,364) | 117,438,287 | 50,603,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of common stock (in shares) | 2,000,000 | 67,904 | 217 | |||||||||||||
Issuance of common stock | 47,570,374 | 1,749,864 | $ 2,000 | $ 68 | $ 1 | 47,568,374 | 1,749,795 | 47,570,374 | 1,749,864 | |||||||
Issuance of preferred stock (in shares) | 2,000,000 | 67,904 | 217 | |||||||||||||
Issuance of preferred stock, net | $ 47,570,374 | $ 1,749,864 | $ 2,000 | $ 68 | $ 1 | $ 47,568,374 | $ 1,749,795 | $ 47,570,374 | $ 1,749,864 | |||||||
Stock compensation expense (in shares) | 3,647 | |||||||||||||||
Stock compensation expense | 95,000 | $ 4 | 94,996 | 95,000 | ||||||||||||
Class OP Units compensation expense | 648,609 | 648,609 | 648,609 | |||||||||||||
Offering costs | (136,282) | (136,282) | (136,282) | |||||||||||||
Reclassification to redeemable common stock | 9,316,023 | 9,316,023 | 9,316,023 | |||||||||||||
Repurchase of common stock (in shares) | (152,036) | |||||||||||||||
Repurchase of common stock | (3,834,609) | $ (152) | (3,834,457) | (3,834,609) | ||||||||||||
Distributions declared, common stock | (1,981,725) | (1,981,725) | (1,981,725) | |||||||||||||
Net income (loss) attributable to common stockholders | 3,505,052 | 3,505,052 | 3,505,052 | |||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 2,000,000 | 7,409,929 | 63,548 | |||||||||||||
Ending balance at Sep. 30, 2021 | $ 224,973,593 | $ 2,000 | $ 7,410 | $ 64 | $ 270,724,156 | $ (96,363,037) | $ 174,370,593 | $ 50,603,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows from Operating Activities: | ||
Net income (loss) | $ 1,742,964 | $ (52,097,300) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 11,817,529 | 13,420,256 |
Stock compensation expense | 2,115,341 | 522,183 |
Amortization of deferred rents | (950,694) | (1,027,863) |
Amortization of deferred lease incentives | 192,235 | 45,903 |
Amortization of deferred financing costs and premium/discount | 207,086 | 796,810 |
Amortization of above-market lease intangibles | 97,367 | 134,412 |
Amortization of below-market lease intangibles | (1,099,723) | (1,157,951) |
Impairment of real estate investment properties | (400,999) | 9,506,525 |
Impairment of goodwill and intangible assets | 0 | 34,572,403 |
Gain on forgiveness of economic relief note payable | (517,000) | 0 |
Gain on sale of real estate investments | (4,532,413) | (1,693,642) |
Unrealized (gain) loss on interest rate swap valuation | (684,057) | 1,019,840 |
Income from investment in unconsolidated entity | (222,705) | (239,028) |
Distributions from investment in unconsolidated entity | 247,929 | 542,140 |
Change in operating assets and liabilities: | ||
Decrease (increase) in tenant receivables | 613,626 | (563,259) |
Increase in note receivable | (1,283,162) | 0 |
Increase in prepaid and other assets | (667,634) | (513,161) |
(Decrease) increase in accounts payable, accrued and other liabilities | (363,007) | 1,173,784 |
Decrease in due to affiliate | 0 | (628,488) |
Net cash provided by operating activities | 6,312,683 | 3,813,564 |
Cash Flows from Investing Activities: | ||
Acquisition of real estate investment | (3,644,221) | 0 |
Additions to existing real estate investments | (531,382) | (600,291) |
Additions to intangible assets | (195,750) | (566,102) |
Collection of receivable from sale of real estate property | 1,824,383 | 0 |
Net proceeds from sale of real estate investments | 22,840,026 | 15,364,073 |
Lease incentives | 0 | (990,000) |
Net cash provided by investing activities | 20,293,056 | 13,207,680 |
Cash Flows from Financing Activities: | ||
Borrowings from credit facilities | 6,000,000 | 4,260,000 |
Repayments of credit facilities | (12,000,000) | (6,000,000) |
Proceeds from mortgage notes payable | 25,436,000 | 35,705,500 |
Principal payments on mortgage notes payable | (29,434,396) | (36,421,500) |
Proceeds from economic relief notes payable | 0 | 527,000 |
Principal payments on short-term notes payable | 0 | (4,800,000) |
Refundable loan deposits | 18,804 | 0 |
Payments of deferred financing costs to third parties | (381,076) | (389,662) |
Proceeds from issuance of preferred stock, net | 47,570,374 | 0 |
Proceeds from issuance of common stock | 2,911,744 | 10,378,762 |
Payments of offering costs | (946,914) | (981,748) |
Repurchases of common stock | (16,881,466) | (13,154,123) |
Distributions paid to common stockholders | (2,565,452) | (4,071,697) |
Net cash provided by (used in) financing activities | 19,727,618 | (14,947,468) |
Net increase in cash, cash equivalents and restricted cash | 46,333,357 | 2,073,776 |
Cash, cash equivalents and restricted cash, beginning of period | 8,377,530 | 6,936,930 |
Cash, cash equivalents and restricted cash, end of period | 54,710,887 | 9,010,706 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest for the nine months ended September 30, 2021 and 2020 (as revised) | 6,116,202 | 6,930,329 |
Supplemental Schedule of Noncash Investing and Financing Activities: | ||
Reclassification from redeemable common stock | 8,247,216 | 4,393,863 |
Reinvested distributions from common stockholders | 3,399,731 | 5,815,165 |
Decrease in share repurchases payable | (1,631,648) | (1,393,275) |
Deferred rents | 683,605 | 0 |
Deferred lease incentive | (2,128,538) | 0 |
Accrued distributions | 123,521 | 291,654 |
Real estate investments held for sale, net | 24,585,739 | 23,033,118 |
Other assets related to real estate investments held for sale | 1,079,361 | 864,008 |
(Increase) decrease in above-market lease intangibles, net | (50,549) | 198,517 |
Mortgage notes payable related to real estate investments held for sale, net | (9,088,438) | (14,671,370) |
Other liabilities related to real estate investments held for sale | (801,337) | (3,934,795) |
Increase in below-market lease intangibles, net | 325,734 | 73,505 |
Increase in interest swap derivatives | $ 14,166 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Preferred Stock | ||
Preferred stock, shares authorized (in shares) | 50,000,000 | |
Preferred stock, shares outstanding (in shares) | 2,000,000 | |
Series A cumulative redeemable perpetual preferred stock | ||
Preferred Stock | ||
Preferred stock, dividend rate, percentage | 7.375% | |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 0 |
Preferred stock, shares outstanding (in shares) | 2,000,000 | 0 |
Preferred stock, shares issued (in shares) | 2,000,000 | 0 |
Class C common stock | ||
Common Stock | ||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares outstanding (in shares) | 7,409,929 | 7,874,541 |
Common stock, shares issued (in shares) | 7,409,929 | 7,874,541 |
Class S common stock | ||
Common Stock | ||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares outstanding (in shares) | 63,548 | 62,860 |
Common stock, shares issued (in shares) | 63,548 | 62,860 |
BUSINESS AND ORGANIZATION
BUSINESS AND ORGANIZATION | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND ORGANIZATION | BUSINESS AND ORGANIZATION Modiv Inc. (the “Company”) was incorporated on May 15, 2015 as a Maryland corporation. The Company has the authority to issue 450,000,000 shares of stock, consisting of 50,000,000 shares of preferred stock, $0.001 par value per share, 300,000,000 shares of Class C common stock, $0.001 par value per share, and 100,000,000 shares of Class S common stock, $0.001 par value per share. The Company's five-year emerging growth company registration with the SEC will end on December 30, 2021 but the Company will continue to report with the SEC as a smaller reporting company under Rule 12b-2 of the Exchange Act. Effective February 1, 2021, with the authorization of the board of directors, the Company filed Articles of Amendment to the Company’s charter in the State of Maryland in order to effect a 1:3 reverse stock split of the Company’s Class C common stock and Class S common stock and, following the implementation of the reverse stock split, to decrease the par value of each post-split share of the Company’s Class C common stock and Class S common stock from $0.003 per share to $0.001 per share. The Company has been internally managed since its December 31, 2019 acquisition of the business of BrixInvest, LLC, a Delaware limited liability company and the Company’s former sponsor (“BrixInvest”), and the Company’s merger with Rich Uncles Real Estate Investment Trust I (“REIT I”) on December 31, 2019 pursuant to an Agreement and Plan of Merger dated September 19, 2019 whereby REIT I merged with and into Katana Merger Sub, LP (“Merger Sub”), a Delaware limited partnership and wholly-owned subsidiary of the Company, with Merger Sub surviving as a direct, wholly-owned subsidiary of the Company (the “Merger”). Through the Merger and acquisitions, the Company created one of the largest non-listed real estate investment funds to be raised via crowdfunding technology and the first real estate crowdfunding platform to be completely investor-owned. The Company holds its investments in real property through special purpose limited liability companies which are wholly-owned subsidiaries of Modiv Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”). The Operating Partnership was formed on January 28, 2016. The Company is the sole general partner of and owned an 86% partnership interest in the Operating Partnership on September 30, 2021. The Operating Partnership limited partners include holders of several classes of units with various vesting and enhancement terms as further described in Note 12 . As of September 30, 2021, the Company's portfolio of approximately 2.2 million square feet of aggregate leasable space consisted of investments in 38 real estate properties, comprised of: 13 retail properties, 14 office properties and 11 industrial properties, including an approximate 72.7% tenant-in-common interest in a Santa Clara, California industrial property (the “TIC Interest”). Self-Management Transaction and Merger on December 31, 2019 The Company was externally managed through December 31, 2019 by its former external advisor, Rich Uncles NNN REIT Operator, LLC, a Delaware limited liability company. On December 31, 2019, the Company merged with REIT I and a self-management transaction was completed, whereby the Company effectuated a contribution agreement, dated September 19, 2019 (the “Contribution Agreement”), pursuant to which the Company acquired substantially all of the assets and assumed certain liabilities of its former external advisor and former sponsor in exchange for units of limited partnership interest in the Operating Partnership (the “Self-Management Transaction”). As a result of the completion of the Self-Management Transaction, the Company became self-managed and eliminated all fees for acquisitions, dispositions and management of its properties, which were previously paid to its former external advisor. Following completion of the Self-Management Transaction and the issuance of various other tranches of general and limited partnership interests, the Company owned an approximately 86% partnership interest in the Operating Partnership as of September 30, 2021. Offerings On July 15, 2015, the Company filed a registration statement on Form S-11 (File No. 333-205684) with the SEC to register an initial public offering of a maximum of 30,000,000 (adjusted for the 1:3 reverse stock split) of its shares of common stock for sale to the public (the “Initial Primary Offering”). The Company also registered a maximum of 3,333,333 (adjusted for the 1:3 reverse stock split) of its shares of common stock pursuant to the Company's distribution reinvestment plan (the “DRP”) (the “Initial DRP Offering” and together with the Initial Primary Offering, the “Initial Registered Offering”). During 2016, the SEC declared the Company's registration statement effective and the Company began offering shares of common stock to the public. Pursuant to the Initial Registered Offering, the Company sold shares of Class C common stock directly to investors, with a minimum investment in shares of $500. Commencing in August 2017, the Company began selling shares of its Class C common stock only to U.S. persons as defined under Rule 903 promulgated under the Securities Act, and began selling shares of its Class S common stock as a result of the commencement of the Class S Offering (as defined below) to non-U.S. Persons. In August 2017, the Company began offering up to 33,333,333 shares (adjusted for the 1:3 reverse stock split) of Class S common stock exclusively to non-U.S. Persons as defined under Rule 903 promulgated under the Securities Act, pursuant to an exemption from the registration requirements of the Securities Act and in accordance with Regulation S of the Securities Act (the “Class S Offering”). The Class S common stock has similar features and rights as the Class C common stock, including with respect to voting and liquidation, except that the Class S common stock offered in the Class S Offering may be sold only to non-U.S. Persons and may be sold through brokers or other persons who may be paid upfront and deferred selling commissions and fees. On December 23, 2019, the Company commenced a follow-on offering pursuant to a new registration statement on Form S-11 (File No. 333-231724) (the “Follow-on Offering”), which registered the offer and sale of up to $800,000,000 in share value of Class C common stock, including $725,000,000 in share value of Class C common stock pursuant to the primary portion of the Follow-on Offering and $75,000,000 in share value of Class C common stock pursuant to the Company's DRP. The Company ceased offering shares pursuant to the Initial Registered Offering concurrently with the commencement of the Follow-on Offering. On January 22, 2021, with the authorization of the board of directors, the Company amended and restated its DRP with respect to the Company's shares of Class C common stock in order to reflect its corporate name change and to remove the ability of the Company's stockholders to elect to reinvest only a portion of their cash distributions in shares through the DRP so that investors who elect to participate in the DRP must reinvest all cash distributions in shares. In addition, the amended and restated DRP provides for determinations of the estimated net asset value (“NAV”) per share by the board of directors more frequently than annually. The amended and restated DRP was effective with respect to distributions that were paid in February 2021. On January 22, 2021, the Company filed a registration statement on Form S-3 (File No. 333-252321) to register a maximum of $100,000,000 in share value of Class C common stock to be issued pursuant to the amended and restated DRP (the “2021 DRP Offering” and, collectively with the Initial DRP Offering, the “Registered DRP Offering”). The Company commenced offering shares of Class C common stock pursuant to the 2021 DRP Offering upon termination of the Follow-on Offering. Effective January 27, 2021, the board of directors terminated the Company’s Follow-on Offering. In connection with the termination of the Follow-on Offering, the Company stopped accepting investor subscriptions on January 22, 2021. As of January 27, 2021, the Company had $600,547,672 in share value of unsold shares in the Follow-on Offering, which were deregistered with the SEC. On February 1, 2021, the Company commenced a private offering of Class C common stock under Regulation D promulgated under the Securities Act (the “Private Offering” and, collectively with the Registered Offerings (as defined below), the “Offerings”) and accepted investor subscriptions from only accredited investors until the Company terminated the Private Offering on August 12, 2021. On June 29, 2021, the Company filed with the SEC a Regulation A Offering Statement on Form 1-A (the “Reg A Offering” and, collectively with the Follow-on Offering and the Registered DRP Offering, the “Registered Offerings”), including its preliminary offering circular, for a $75,000,000 offering of its Class C common stock and filed an amended Form 1-A on August 13, 2021. The SEC qualified the amended Regulation A Offering Statement on Form 1-A on August 16, 2021. The Reg A Offering allowed the Company to once again accept subscriptions from investors who are not accredited. Preferred Stock On September 14, 2021, the Company and the Operating Partnership entered into an underwriting agreement (the “Underwriting Agreement”) with B. Riley Securities, Inc., as representative of the underwriters listed on Schedule I thereto (collectively, the “Underwriters”), pursuant to which the Company agreed to issue and sell 1,800,000 shares of the Company’s 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value per share (the “Series A Preferred Stock”) in an underwritten public offering (the “Preferred Offering”) at a price per share of $25.00. In addition, the Company granted the Underwriters a 30-day option to purchase up to an additional 200,000 shares of the Series A Preferred Stock, which the Underwriters exercised in full on September 16, 2021. The issuance and sale of the shares of Series A Preferred Stock, including the Underwriters’ full exercise of their option to purchase additional shares, closed on September 17, 2021 (see Note 9 for additional information). Estimated NAV Per Share (Unaudited) Since December 31, 2020, the Company’s board of directors has approved and established an updated quarterly estimated NAV per share of the Company’s Class C common stock and Class S common stock as follows: Valuation Date Effective Date NAV Per Share December 31, 2020 January 27, 2021 $23.03 (unaudited and adjusted for the 1:3 reverse stock split on February 1, 2021) March 31, 2021 May 5, 2021 $24.61 (unaudited) June 30, 2021 August 4, 2021 $26.05 (unaudited) September 30, 2021 November 5, 2021 $27.29 (unaudited) Additional information on the determination of the Company's most recent estimated NAV per share, including the process used to determine its estimated NAV per share, can be found in the Company's Current Report on Form 8-K filed with the SEC on November 5, 2021. Effective November 5, 2021, the purchase price per share of the Company’s Class C common stock in the Reg A Offering was increased from $26.05 (unaudited) to $27.29 (unaudited). Also, commencing November 5, 2021, the purchase price per share in the primary portion of the Class S Offering was increased to $27.29 (unaudited) plus the amount of any applicable upfront commissions and fees, and the NAV per share used for purposes of the share repurchase programs was increased to $27.29 (unaudited) for repurchase requests made starting on November 1, 2021. Beginning with distributions scheduled to be paid to stockholders on November 25, 2021, the purchase price per share of the Company’s common stock in the Class C and the Class S DRPs was increased from $26.05 (unaudited) to $27.29 (unaudited). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements and the rules and regulations of the SEC. Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. Such unaudited condensed consolidated financial statements and accompanying notes are the representations of the Company’s management, which is responsible for their integrity and objectivity. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2020 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2021. The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which are normal and recurring, necessary to fairly state the Company's financial position, results of operations and cash flows. All significant intercompany balances and transactions are eliminated in consolidation. The unaudited condensed consolidated balance sheet as of December 31, 2020 included herein was derived from the audited financial statements. Reverse Stock Split On February 1, 2021, the Company effected a 1:3 reverse stock split of its Class C common stock and Class S common stock and, following the implementation of the reverse stock split, decreased the par value of each share of the Company’s Class C common stock and Class S common stock from $0.003 per share to $0.001 per share. The Company has reflected the effect of the reverse stock split in the accompanying unaudited condensed consolidated financial statements and related notes as if it had occurred at the beginning of the earliest period presented. Use of Estimates The preparation of the unaudited condensed consolidated financial statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. These estimates are based on historical experience and, in some cases, assumptions based on current and future market experience, including considerations related to the COVID-19 pandemic (see Notes 3 and 5 for impairment charges related primarily to COVID-19). Actual results may differ from those estimates. Noncontrolling Interests in the Operating Partnership The Company accounts for the noncontrolling interests in its Operating Partnership in accordance with the related accounting guidance. Due to the Company's control of the Operating Partnership through its general partnership interest therein and the limited rights of the limited partners, the Operating Partnership, including its wholly-owned subsidiaries, are consolidated with the Company, and the limited partner interests not held by the Company are reflected as noncontrolling interests in the accompanying unaudited condensed consolidated balance sheets and statements of equity. The noncontrolling interests were issued on December 31, 2019 and represent non-voting, non-dividend accruing interests with no allocation of profits or losses. As described in Note 12 , the interests were not able to be converted or exchanged prior to (i) December 31, 2020, the one-year anniversary of the closing of the Self-Management Transaction (in the case of the units of Class M limited partnership interest (“Class M OP Units”) in the Operating Partnership), or (ii) the expiration of the Lockup Period (as defined in Note 12 ) (in the case of the units of Class P limited partnership interest (“Class P OP Units”) in the Operating Partnership). As of September 30, 2021, no interests have been converted or exchanged. On January 25, 2021, the board of directors approved the grant of units of Class R limited partnership interest (“Class R OP Units”) to all employees of the Company. As described in detail in Note 12, all units granted vest on January 25, 2024 and are then mandatorily convertible into units of Class C limited partnership interest in the Operating Partnership (“Class C OP Units”) no later than March 31, 2024. Business Combinations The Company accounts for business combinations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”) and applicable Accounting Standards Updates (each, an “ASU”), whereby the total consideration transferred is allocated to the assets acquired and liabilities assumed, including amounts attributable to any non-controlling interests, when applicable, based on their respective estimated fair values as of the date of acquisition. Goodwill represents the excess of consideration transferred over the estimated fair value of the net assets acquired in a business combination. ASC 805 defines a business as an integrated set of activities and assets (collectively, a “set”) that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs, or other economic benefits directly to investors or other owners, members, or participants. To be considered a business, the set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. ASC 805 provides a practical screen to determine when a set would not be considered a business. If the screen is not met and further assessment determines that the set is not a business, then the set is an asset acquisition. The primary difference between a business combination and an asset acquisition is that an asset acquisition requires cost accumulation and allocation at relative fair value. Acquisition costs are capitalized for an asset acquisition and expensed for a business combination. Revenue Recognition The Company accounts for revenue in accordance with FASB ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606 ) (“ASU No. 2014-09”), which includes revenue generated by sales of real estate, other operating income and tenant reimbursements for substantial services earned at the Company’s properties. Such revenues are recognized when the services are provided and the performance obligations are satisfied. Tenant reimbursements, consisting of amounts due from tenants for common area maintenance, property taxes and other recoverable costs, are recognized in rental income subsequent to the adoption of Topic 842, as discussed below, in the period the recoverable costs are incurred. Tenant reimbursements, for which the Company pays the associated costs directly to third-party vendors and is reimbursed by the tenants, are recognized and recorded on a gross basis. The Company accounts for leases in accordance with FASB ASU No. 2016-02, Leases (Topic 842), and the related FASB ASU Nos. 2018-10, 2018-11, 2018-20 and 2019-01, which provide practical expedients, technical corrections and improvements for certain aspects of ASU No. 2016-02, on a modified retrospective basis (collectively, “Topic 842”). Topic 842 establishes a single comprehensive model for entities to use in accounting for leases. Topic 842 applies to all entities that enter into leases. Lessees are required to report assets and liabilities that arise from leases. Lessor accounting has largely remained unchanged; however, certain refinements were made to conform with revenue recognition guidance, specifically related to the allocation and recognition of contract consideration earned from lease and non-lease revenue components. Topic 842 impacts the Company's accounting for leases primarily as a lessor. However, Topic 842 also impacts the Company's accounting as a lessee but is considered not material. As a lessor, the Company's leases with tenants generally provide for the lease of real estate properties, as well as common area maintenance, property taxes and other recoverable costs. To reflect recognition as one lease component, rental income and tenant reimbursements and other lease related property income that meet the requirements of the practical expedient provided by ASU No. 2018-11 have been combined under rental income in the Company's unaudited condensed consolidated statements of operations. For the three months ended September 30, 2021 and 2020, tenant reimbursements included in rental income amounted to $1,640,835 and $1,622,218, respectively, and for the nine months ended September 30, 2021 and 2020, tenant reimbursements included in rental income amounted to $5,036,196 and $5,521,723, respectively. The Company recognizes rental income from tenants under operating leases on a straight-line basis over the noncancelable term of the lease when collectability of such amounts is reasonably assured. Recognition of rental income on a straight-line basis includes the effects of rental abatements, lease incentives and fixed and determinable increases in lease payments over the lease term. If the lease provides for tenant improvements, management of the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or by the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that the tenant can take in the form of cash or a credit against its rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: • whether the lease stipulates how a tenant improvement allowance may be spent; • whether the amount of a tenant improvement allowance is in excess of market rates; • whether the tenant or landlord retains legal title to the improvements at the end of the lease term; • whether the tenant improvements are unique to the tenant or general-purpose in nature; and • whether the tenant improvements are expected to have any residual value at the end of the lease. Tenant reimbursements of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period the expenses are incurred and presented gross if the Company is the primary obligor and, with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk. In instances where the operating lease agreement has an early termination option, the termination penalty is based on a predetermined termination fee or based on the unamortized tenant improvements and leasing commissions. The Company evaluates the collectability of rents and other receivables on a regular basis based on factors including, among others, payment history, credit rating, the asset type, and current economic conditions. If the Company’s evaluation of these factors indicates it may not recover the full value of the receivable, it provides an allowance against the portion of the receivable that it estimates may not be recovered. This analysis requires the Company to determine whether there are factors indicating a receivable may not be fully collectible and to estimate the amount of the receivable that may not be collected. Gain or Loss on Sale of Real Estate Property The Company recognizes gain or loss on sale of real estate property when the Company has executed a contract for sale of the property, transferred controlling financial interest in the property to the buyer and determined that it is probable that the Company will collect substantially all of the consideration for the property. The Company's real estate property sale transactions during the three and nine months ended September 30, 2021 and 2020 met these criteria at closing. When properties are sold, operating results of the properties remain in continuing operations, and any associated gain or loss from the disposition is included in gain or loss on sale of real estate investments in the Company’s accompanying unaudited condensed consolidated statements of operations. Bad Debts and Allowances for Tenant and Deferred Rent Receivables The Company's determination of the adequacy of its allowances for tenant receivables includes a binary assessment of whether or not the amounts due under a tenant’s lease agreement are probable of collection. For such amounts that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term. For such amounts that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount which would be recognized on a straight-line basis or (ii) cash that has been received from the tenant, with any tenant and deferred rent receivable balances charged as a direct write-off against rental income in the period of the change in the collectability determination. In addition, for tenant and deferred rent receivables deemed probable of collection, the Company also may record an allowance under other authoritative GAAP depending upon the Company's evaluation of the individual receivables, specific credit enhancements, current economic conditions, and other relevant factors. Such allowances are recorded as increases or decreases through rental income in the Company's unaudited condensed consolidated statements of operations. With respect to tenants in bankruptcy, management makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectability of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. When a tenant is in bankruptcy, the Company will record a bad debt allowance for the tenant’s receivable balance and generally will not recognize subsequent rental income until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments. Leasing Costs Initial direct costs such as legal fees and commissions are capitalized and amortized over the term of the lease. Internal leasing costs are charged to expense as incurred. These expenses are included in property expenses in the Company's unaudited condensed consolidated statements of operations. Impairment of Investment in Real Estate Properties The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of real estate assets may not be recoverable. When indicators of potential impairment are present that indicate that the carrying amounts of real estate assets may not be recoverable, management assesses whether the carrying value of the assets will be recovered through the future undiscounted operating cash flows expected from the use of and eventual disposition of the property. If, based on the analysis, the Company does not believe that it will be able to recover the carrying value of the asset, the Company records an impairment charge to the extent the carrying value exceeds the estimated fair value of the asset. As more fully discussed in Note 3 , the Company recorded impairment charges of $9,506,525 related to four of its real estate properties during the nine months ended September 30, 2020. The Company did not incur any impairment charges for its real estate properties during the three months September 30, 2021 and 2020 and the nine months ended September 30, 2021. However, the Company recognized a reversal of a prior year impairment charge of $400,999 in June 2021 related to a real estate property that is no longer classified as held for sale (see Note 3 for more details). Other Comprehensive Loss For all periods presented, other comprehensive loss is the same as net loss. Per Share Data The Company reports a dual presentation of basic earnings per share (“Basic EPS”) and diluted earnings per share (“Diluted EPS”). Basic EPS excludes dilution and is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted EPS uses the treasury stock method or the if-converted method, where applicable, to compute for the potential dilution that would occur if dilutive securities or commitments to issue common stock were exercised. Diluted EPS is the same as Basic EPS for the three and nine months ended September 30, 2020 as the Company had a net loss attributable to common stockholders for both reported periods. As of September 30, 2021, there were 657,949.5 Class M OP Units, 56,029 Class P OP Units and 353,003 Class R OP Units, net of forfeiture of 6,997 units (adjusted for the 1:3 reverse stock split) that are convertible into Class C OP Units (see Note 12 for more details). The holders of Class C OP Units may exchange such Class C OP Units for shares of the Company's Class C common stock on a 1-for-1 basis or, at the Company’s sole and absolute discretion, for cash. The Class M OP Units, Class P OP Units and Class R OP Units, and the shares of Class C common stock into which they may ultimately be converted, were excluded from the computation of Diluted EPS for the three and nine months ended September 30, 2020 because their effect would not be dilutive. The weighted average dilutive effect of such units for the three and nine months ended September 30, 2021 was an increase of 1,219,316 and 1,188,099 shares, respectively, included in the computation of Diluted EPS. There were no other outstanding securities or commitments to issue common stock that would have a dilutive effect for the periods then ended. The Company has presented the basic and diluted net loss per share amounts on the accompanying unaudited condensed consolidated statements of operations for Class C and Class S share classes as a combined common share class. Application of the two-class method for allocating net loss attributable to common stockholders in accordance with the provisions of ASC 260, Earnings per Share , would have resulted in basic net income (loss) attributable to common stockholders of $0.47 and $(0.12) per share of Class C common stock for the three months ended September 30, 2021 and 2020, respectively, net income (loss) attributable to common stockholders of $0.47 and $(0.12) per share of Class S common stock for the three months ended September 30, 2021 and 2020, respectively, net income (loss) attributable to common stockholders of $0.21 and $(6.51) per share of Class C common stock for the nine months ended September 30, 2021 and 2020, respectively, and net income (loss) attributable to common stockholders of $0.20 and $(6.51) per share of Class S common stock for the nine months ended September 30, 2021 and 2020, respectively. The two-class method would have resulted in diluted net income (loss) attributable to common stockholders of $0.40 and $(0.12) per share of Class C common stock for the three months ended September 30, 2021 and 2020, respectively, diluted net income (loss) attributable to common stockholders of $0.47 and $(0.12) per share of Class S common stock for the three months ended September 30, 2021 and 2020, respectively, diluted net income (loss) attributable to common stockholders of $0.18 and $(6.51) per share of Class C common stock for the nine months ended September 30, 2021 and 2020, respectively, and diluted net income (loss) attributable to common stockholders of $0.20 and $(6.51) per share of Class S common stock for the nine months ended September 30, 2021 and 2020, respectively. Any difference in net loss per share if allocated under this method primarily reflects the lower effective distributions per share for Class S stockholders as a result of the payment of the deferred commission to the Class S distributor of these shares, and also reflects the impact of the timing of the declaration of the distributions relative to the time the shares were outstanding. Fair Value Disclosures Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an existing price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy, which is based on three levels of inputs, the first two of which are considered observable and the last unobservable, that may be used to measure fair value, is as follows: Level 1: quoted prices in active markets for identical assets or liabilities; Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The fair value for certain financial instruments is derived using valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of financial instrument for which it is practicable to estimate the fair value: Cash and cash equivalents, restricted cash, receivable from sale of real estate property, tenant receivables, prepaid expenses and other assets and accounts payable, accrued and other liabilities: These balances approximate their fair values due to their short maturities. Derivative Instruments: The Company’s derivative instruments are presented at fair value in the accompanying unaudited condensed consolidated balance sheets. The valuation of these instruments is determined using a proprietary model that utilizes observable inputs. As such, the Company classifies these inputs as Level 2 inputs. The proprietary model uses the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and volatility. The fair values of interest rate swaps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit risks to the contracts, are incorporated in the fair values to account for potential nonperformance risk. Goodwill and Intangible Assets: The fair value measurements of goodwill and intangible assets are considered Level 3 nonrecurring fair value measurements. For goodwill, fair value measurement involves the determination of fair value of a reporting unit. The Company has used a Monte Carlo simulation model to estimate future performance, generating the fair value of the reporting unit's business. For intangible assets, fair value measurements include assumptions with inherent uncertainty, including projected offerings volumes and related projected revenues and long-term growth rates, among others. The carrying value of the Company's intangible assets is at risk of impairment if the Company experiences an adverse change in its business climate or has a current expectation that, more likely than not, an asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. Credit facilities and economic relief note payable: The fair values of the Company’s credit facilities and economic relief note payable approximate the carrying values of the credit facility and economic relief note payable as their interest rates and other terms are comparable to those available in the market place for a similar credit facility and short-term note, respectively. Mortgage notes payable: The fair value of the Company’s mortgage notes payable is estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities or similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs. Restricted Cash Restricted cash is comprised of funds which are restricted for use as required by certain lenders in conjunction with an acquisition or debt financing or modification and for on-site and tenant improvements or property taxes. Restricted cash as of September 30, 2021 and December 31, 2020 amounted to $2,410,951 and $129,118, respectively, for the properties discussed below and other lender reserves. Under the terms of the Company’s June 2021 refinancing of mortgages on its properties leased to Northrop Grumman and L3Harris Technologies, Inc. (“L3Harris”) with Banc of California as described in Note 7 , the Company established restricted cash accounts at Banc of California with $1,271,462 and $1,000,000 held for the Northrop Grumman and L3Harris properties, respectively, to fund building improvements, tenant improvements and leasing commissions. During the three months ended September 30, 2021, the amount of $128,538 was released to fund a leasing commission. Pursuant to amended lease agreements, the Company had an obligation to pay for tenant improvements as of September 30, 2021 and December 31, 2020 of $189,136 and $60,598, respectively, for tenant improvements to be incurred by tenants for which funds restricted by the lender were available. As of September 30, 2021 and December 31, 2020, the Company's restricted cash held to fund other improvements and leasing commissions totaled $2,271,462 and $32,086, respectively. Real Estate Investments Held for Sale The Company generally considers a real estate investment to be “held for sale” when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as “real estate investment held for sale, net” and “assets related to real estate investment held for sale,” respectively, in the accompanying unaudited condensed consolidated balance sheets. Mortgage notes payable and other liabilities related to real estate investments held for sale are classified as “mortgage notes payable related to real estate investments held for sale, net” and “liabilities related to real estate investments held for sale,” respectively, in the accompanying unaudited condensed consolidated balance sheets. Real estate investments classified as held for sale are no longer depreciated and are reported at the lower of their carrying value or their estimated fair value less estimated costs to sell. Operating results of properties that were classified as held for sale in the ordinary course of business are included in continuing operations in the Company’s accompanying unaudited condensed consolidated statements of operations. Goodwill and Other Intangible Assets The Company records goodwill when the purchase price of a business combination exceeds the estimated fair value of net identified tangible and intangible assets acquired. The Company evaluates goodwill and other intangible assets for possible impairment in accordance with ASC 350, Intangibles–Goodwill and Other, on an annual basis, or more frequently when events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit has declined below its carrying value. If the carrying amount of the reporting unit exceeds its fair value, an impairment charge is recognized. In assessing goodwill impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that the fair value of a reporting unit is less than its carrying amount. The Company’s qualitative assessment of the recoverability of goodwill considers various macro-economic, industry-specific and company-specific factors. These factors include: (i) severe adverse industry or economic trends; (ii) significant company-specific actions, including exiting an activity in conjunction with restructuring of operations; (iii) current, historical or projected deterioration of the Company’s financial performance; or (iv) a sustained decrease in the Company’s market capitalization below its net book value. If, after assessing the totality of events or circumstances, the Company determines it is unlikely that the fair value of such reporting unit is less than its carrying amount, then a quantitative analysis is unnecessary. However, if the Company concludes otherwise, or if it elects to bypass the qualitative analysis, then it is required to perform a quantitative analysis that compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered impaired; otherwise, a goodwill impairment loss is recognized for the lesser of: (a) the amount that the carrying amount of a reporting unit exceeds its fair value; or (b) the amount of the goodwill allocated to that reporting unit. Intangible assets consist of purchased investor-related intangible assets, marketing-related intangible assets, developed or acquired technology and other intangible assets. Intangible assets are amortized over their estimated useful lives using the straight-line method ranging from three years to five years. No significant residual value is estimated for intangible assets. An asset is considered impaired if its carrying amount exceeds the future net cash flow the asset is expected to generate or if the Company has a current expectation that, more likely than not, an asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company evaluates long-lived assets (including intangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. Restricted Stock and Restricted Stock Unit Awards The fair values of the Operating Partnership's units or restricted stock unit awards issued or granted by the Company are based on an estimated value per share of the Company’s common stock on the date of issuance or grant, adjusted for an illiquidity discount due to the illiquid nature of the underlying equity. Operating |
REAL ESTATE INVESTMENTS, NET
REAL ESTATE INVESTMENTS, NET | 9 Months Ended |
Sep. 30, 2021 | |
Real Estate [Abstract] | |
REAL ESTATE INVESTMENTS, NET | REAL ESTATE INVESTMENTS, NET As of September 30, 2021, the Company’s real estate investment portfolio consisted of 38 operating properties located in 14 states comprised of: 13 retail properties, 14 office properties and 11 industrial properties, including the TIC Interest not reflected in the table below but discussed in Note 4 . The following table provides summary information regarding the Company’s operating properties as of September 30, 2021: Property Location Acquisition Date Property Type Land, Buildings and Improvements Tenant Origination and Absorption Costs Accumulated Depreciation and Amortization Total Investment in Real Estate Property, Net Accredo Health Orlando, FL 6/15/2016 Office $ 9,855,847 $ 1,269,350 $ (2,506,329) $ 8,618,868 Dollar General Litchfield, ME 11/4/2016 Retail 1,281,812 116,302 (196,188) 1,201,926 Dollar General Wilton, ME 11/4/2016 Retail 1,543,776 140,653 (251,079) 1,433,350 Dollar General Thompsontown, PA 11/4/2016 Retail 1,199,860 106,730 (188,502) 1,118,088 Dollar General Mt. Gilead, OH 11/4/2016 Retail 1,174,188 111,847 (180,730) 1,105,305 Dollar General Lakeside, OH 11/4/2016 Retail 1,112,872 100,857 (185,485) 1,028,244 Dollar General Castalia, OH 11/4/2016 Retail 1,102,086 86,408 (180,218) 1,008,276 Northrop Grumman Melbourne, FL 3/7/2017 Office 12,382,991 1,469,737 (3,466,555) 10,386,173 exp US Services Maitland, FL 3/27/2017 Office 6,056,668 388,248 (1,001,253) 5,443,663 Harley (1) Bedford, TX 4/13/2017 Retail 12,947,054 — (1,281,445) 11,665,609 Wyndham Summerlin, NV 6/22/2017 Office 10,406,483 669,232 (1,436,091) 9,639,624 Williams Sonoma Summerlin, NV 6/22/2017 Office 8,079,612 550,486 (1,292,121) 7,337,977 Omnicare Richmond, VA 7/20/2017 Industrial 7,275,115 281,442 (1,016,164) 6,540,393 EMCOR Cincinnati, OH 8/29/2017 Office 5,960,610 463,488 (738,712) 5,685,386 Husqvarna Charlotte, NC 11/30/2017 Industrial 11,840,200 1,013,948 (1,381,471) 11,472,677 AvAir Chandler, AZ 12/28/2017 Industrial 27,357,899 — (2,631,689) 24,726,210 3M DeKalb, IL 3/29/2018 Industrial 14,762,819 2,356,361 (4,410,594) 12,708,586 Cummins Nashville, TN 4/4/2018 Office 14,538,528 1,536,998 (2,759,017) 13,316,509 Northrop Grumman Parcel Melbourne, FL 6/21/2018 Land 329,410 — — 329,410 Texas Health Dallas, TX 9/13/2018 Office 6,976,703 713,221 (904,326) 6,785,598 Bon Secours Richmond, VA 10/31/2018 Office 10,399,820 800,356 (1,318,163) 9,882,013 Costco Issaquah, WA 12/20/2018 Office 27,330,797 2,765,136 (3,631,336) 26,464,597 Taylor Fresh Foods Yuma, AZ 10/24/2019 Industrial 34,194,369 2,894,017 (2,588,277) 34,500,109 Raising Cane's San Antonio, TX 7/26/2021 Retail 3,430,224 213,997 (24,221) 3,620,000 Levins Sacramento, CA 12/31/2019 Industrial 4,429,390 221,927 (386,065) 4,265,252 Dollar General Bakersfield, CA 12/31/2019 Retail 4,899,714 261,630 (257,482) 4,903,862 Labcorp San Carlos, CA 12/31/2019 Industrial 9,672,174 408,225 (357,562) 9,722,837 GSA (MSHA) Vacaville, CA 12/31/2019 Office 3,112,076 243,307 (242,401) 3,112,982 PreK Education San Antonio, TX 12/31/2019 Retail 12,447,287 555,767 (1,006,332) 11,996,722 Dollar Tree Morrow, GA 12/31/2019 Retail 1,320,367 73,298 (124,094) 1,269,571 Solar Turbines San Diego, CA 12/31/2019 Office 7,133,241 284,026 (561,523) 6,855,744 Wood Group San Diego, CA 12/31/2019 Industrial 9,869,520 539,633 (806,309) 9,602,844 ITW Rippey El Dorado, CA 12/31/2019 Industrial 7,071,143 304,387 (532,405) 6,843,125 Dollar General Big Spring, TX 12/31/2019 Retail 1,281,683 76,351 (89,195) 1,268,839 Gap Rocklin, CA 12/31/2019 Office 8,407,236 360,377 (839,188) 7,928,425 L3Harris San Diego, CA 12/31/2019 Industrial 11,631,857 454,035 (823,940) 11,261,952 Sutter Health Rancho Cordova, CA 12/31/2019 Office 29,586,023 1,616,610 (1,890,868) 29,311,765 Walgreens Santa Maria, CA 12/31/2019 Retail 5,223,442 335,945 (232,681) 5,326,706 $ 347,624,896 $ 23,784,332 $ (41,720,011) $ 329,689,217 (1) Reclassified to real estate investment held for investment and use during the second quarter of 2021 from real estate held for sale beginning September 30, 2020 (see detailed discussion below). Impairment Charges During late March 2020, the Company learned that there would be a substantial impact on the commercial real estate market and specifically on fitness centers such as the Company's property leased at that time to 24 Hour Fitness USA, Inc. (“24 Hour Fitness”) due to the COVID-19 pandemic and the requirement of an indefinite and potentially extended period of store closures. On March 31, 2020, the Company received written notice from 24 Hour Fitness that due to circumstances beyond its control, including the response to the COVID-19 pandemic and directives and mandates of various governmental authorities affecting the Las Vegas, Nevada 24 Hour Fitness store leased from the Company, it would not make the April 2020 rent payment. Despite negotiations with the tenant, no further rent payments were received and on June 15, 2020, the Company received written notice that the lease was formally rejected in connection with 24 Hour Fitness' Chapter 11 bankruptcy proceeding and the premises were surrendered to the Company's subsidiary. The lender on the property agreed to temporarily reduce its $32,000 monthly mortgage payment by $8,000 from May through August 2020 and the Company's special purpose subsidiary determined that if it was unable to secure a replacement tenant, then it would consider allowing the lender to foreclose on, and take possession of, the property. As such, the Company concluded that it was necessary to record an impairment charge to reduce the net book value of the property to its estimated fair value. In addition, the Company determined that the effects of the COVID-19 pandemic on the overall economy and commercial real estate market would also have negative impacts on the Company's ability to re-lease two vacant properties, the property formerly leased to Dinan Cars located in Morgan Hill, California through January 31, 2020 and the property leased to Dana, but unoccupied, located in Cedar Park, Texas. Based on an evaluation of the value of these properties, the Company determined that impairment charges were required during the three months ended March 31, 2020 to reflect the reduction in value due to the uncertainty regarding leasing or sale prospects. During the three months ended March 31, 2020, the Company recorded impairment charges aggregating $9,157,068, based on the estimated fair values of the aforementioned real estate properties. During the three months ended June 30, 2020, the Company recorded an additional impairment charge of $349,457 related to its property located in Lake Elsinore, California and leased to Rite Aid through February 29, 2028. The Company determined that the impairment charge was required, representing the excess of the property's carrying value over the property's estimated sale price less estimated selling costs for the subsequent sale. The aggregate impairment charges of $9,157,068 represented approximately 2.2% of the Company’s total investments in real estate property before impairments as of March 31, 2020 and the impairment charge of $349,457 represented approximately 0.1% of the Company’s total investments in real estate property before impairments as of June 30, 2020. The properties formerly leased by Rite Aid, Dinan Cars, 24 Hour Fitness and Dana were sold in August, October and December 2020 and July 2021, respectively. There were no impairment charges recorded during the three months ended September 30, 2021 and 2020 and the nine months ended September 30, 2021. The details of the Company's real estate impairment charges for the nine months ended September 30, 2020 were as follows: Property Location Nine Months Ended Rite Aid Lake Elsinore, CA $ 349,457 Dana Cedar Park, TX 2,184,395 24 Hour Fitness Las Vegas, NV 5,664,517 Dinan Cars Morgan Hill, CA 1,308,156 Total $ 9,506,525 Acquisition During the nine months ended September 30, 2021, the Company acquired the following real estate property: Property Acquisition Date Land Buildings and Tenant Total Raising Cane's 7/26/2021 $ 1,902,069 $ 1,528,155 $ 213,997 $ 3,644,221 During the three and nine months ended September 30, 2021, the Company recognized $47,004 of total revenue related to the above-acquired property. The noncancellable lease term of the property acquired during the nine months ended September 30, 2021 is as follows: Property Lease Expiration Raising Cane's 2/20/2028 The Company did not acquire any real estate properties during the nine months ended September 30, 2020. Dispositions The dispositions during the nine months ended September 30, 2021 and 2020 were as follows: Nine Months Ended September 30, 2021 Property Location Disposition Date Property Type Rentable Square Feet Contract Sale Price Gain on Sale Chevron Gas Station Roseville, CA 1/7/2021 Retail 3,300 $ 4,050,000 $ 228,769 EcoThrift Sacramento, CA 1/29/2021 Retail 38,536 5,375,300 51,415 Chevron Gas Station San Jose, CA 2/12/2021 Retail 1,060 4,288,888 9,458 Dana Cedar Park, TX 7/7/2021 Industrial 45,465 10,000,000 4,127,638 88,361 $ 23,714,188 4,417,280 24 Hour Fitness Adjustment 115,133 Total $ 4,532,413 On January 7, 2021, the Company completed the sale of its Roseville, California retail property, which was leased to the operator of a Chevron gas station, for $4,050,000, which generated net proceeds of $3,914,909 after payment of commissions and closing costs. On January 29, 2021, the Company completed the sale of its Sacramento, California retail property, which was leased to EcoThrift, for $5,375,300, which generated net proceeds of $2,684,225 after repayment of the existing mortgage, commissions and closing costs. On February 12, 2021, the Company completed the sale of its San Jose, California retail property, which was leased to the operator of a Chevron gas station, for $4,288,888, which generated net proceeds of $4,054,327 after payment of commissions and closing costs. On July 7, 2021, the Company completed the sale of its Cedar Park, Texas industrial property which was leased to Dana Incorporated, but unoccupied, for $10,000,000, which generated net proceeds of $4,975,334 after repayment of the existing mortgage, commissions and closing costs. Upon the sale of the property, Dana Incorporated executed a promissory note payable to the Company for its obligation to continue to pay rent of $65,000 per month through July 2022 and pay its early termination fee of $1,381,767 no later than July 31, 2022. The unpaid amount of the Company's note receivable of $1,966,767 is presented as receivable from early termination of lease in the Company's unaudited condensed consolidated balance sheet as of September 30, 2021. On September 24, 2021, the Company received a notice of refund amounting to $115,133 related to the sale of its Las Vegas, Nevada retail property on December 16, 2020, which was formerly leased to 24 Hour Fitness. The refund relates to a portion of a holdback from sales proceeds to cover expenses by the buyer to prepare the property for lease, including the payment of accrued interest, common area maintenance, taxes, insurance and other related expenses and building permits to begin construction of improvements on the property. The refund was recognized as an adjustment to the estimate of the amount which was expected to be received and was included in gain on sale of real estate investments in the accompanying unaudited condensed consolidated statements of operations. Nine Months Ended September 30, 2020 Property Location Disposition Date Property Type Rentable Square Feet Contract Sale Price (Loss) Gain on Sale Rite Aid Lake Elsinore, CA 8/3/2020 Retail 70,960 $ 7,250,000 $ (422) Walgreens Stockbridge, GA 8/27/2020 Retail 15,120 5,538,462 1,306,768 Island Pacific Elk Grove, CA 9/16/2020 Retail 27,296 3,155,000 387,296 Total 113,376 $ 15,943,462 $ 1,693,642 On August 3, 2020, the Company completed the sale of its Lake Elsinore, California retail property, which was leased to Rite Aid, for $7,250,000, which generated net proceeds of $3,299,016 after repayment of the existing mortgage, commissions and closing costs. On August 27, 2020, the Company completed the sale of its Stockbridge, Georgia retail property, which was leased to Walgreens, for $5,538,462, which generated net proceeds of $5,296,356 after payment of commissions and closing costs. On September 16, 2020, the Company completed the sale of its Elk Grove, California retail property, which was leased to Island Pacific, for $3,155,000, which generated net proceeds of $1,124,016 after repayment of the existing mortgage, commissions and closing costs. Asset Concentration The Company held no real estate property with a net book value that is greater than 10% of its total assets as of September 30, 2021 or December 31, 2020. Revenue Concentration No tenant represented the source of 10% of total revenues during the three and nine months ended September 30, 2021 nor during the three and nine months ended September 30, 2020. Operating Leases The Company’s real estate properties are primarily leased to tenants under net leases for which terms and expirations vary. The Company monitors the credit of all tenants to stay abreast of any material changes in credit quality. The Company monitors tenant credit by (1) reviewing the credit ratings of tenants (or their parent companies or lease guarantors) that are rated by nationally recognized rating agencies; (2) reviewing financial statements and related metrics and information that are publicly available or that are required to be provided pursuant to the lease; (3) monitoring news reports and press releases regarding the tenants (or their parent companies or lease guarantors), and their underlying business and industry; and (4) monitoring the timeliness of rent collections. During the first four months of 2020, the Company paid an aggregate of $990,000 in lease incentives to cancel certain termination options related to two leases with Walgreens for its Santa Maria, California and Stockbridge, Georgia properties, resulting in extension of the leases for approximately 10 years each. The Stockbridge property was sold on August 27, 2020. These costs were capitalized and are amortized over the period of the extension for the Santa Maria property and were charged to cost of sale for the Stockbridge property in August 2020. During the second quarter of 2021, the tenant in the Company's PreK Education retail property in San Antonio, Texas exercised its option to extend its lease term for eight years from the original termination of July 31, 2021 to July 31, 2029 with an increase in monthly rent. The terms of the original lease required the Company to pay a $2,000,000 term completion incentive upon exercise of the option and the tenant agreed to defer the timing of this payment to no later than January 31, 2022. The deferred lease incentive is presented under prepaid and other assets and the obligation is included in accounts payable, accrued and other liabilities in the Company's balance sheet as of September 30, 2021. As of September 30, 2021, the future minimum contractual rent payments due to the Company under the Company’s non-cancellable operating leases, including lease amendments executed though the date of this report are as follows: October through December 2021 $ 6,687,205 2022 26,946,631 2023 25,024,065 2024 24,593,849 2025 21,424,993 2026 14,552,340 Thereafter 60,307,335 $ 179,536,418 Lease Intangible Assets, Net As of September 30, 2021, the Company’s lease intangible assets were as follows: Tenant Origination and Absorption Costs Above-Market Lease Intangibles Below-Market Lease Intangibles Cost $ 23,784,332 $ 1,128,549 $ (15,097,132) Accumulated amortization (12,041,766) (405,074) 3,631,118 Net amount $ 11,742,566 $ 723,475 $ (11,466,014) The intangible assets acquired in connection with the acquisitions have a weighted average amortization period of approximately 9.3 years as of September 30, 2021. As of September 30, 2021, the amortization of intangible assets for the remaining three months ending December 31, 2021 and for each of the next five years and thereafter is expected to be as follows: Tenant Origination and Absorption Costs Above-Market Lease Intangibles Below-Market Lease Intangibles October through December 2021 $ 792,583 $ 32,455 $ (363,041) 2022 2,715,030 129,823 (1,217,029) 2023 1,838,120 127,174 (921,169) 2024 1,726,446 122,543 (917,750) 2025 1,344,132 115,996 (917,750) 2026 720,006 78,557 (912,347) Thereafter 2,606,249 116,927 (6,216,928) $ 11,742,566 $ 723,475 $ (11,466,014) Weighted-average remaining amortization period 7.1 years 6.6 years 11.8 years Real Estate Investments Held For Sale As a result of the COVID-19 pandemic discussed in Note 1 , starting during the second quarter of 2020, the Company deemed it necessary to sell certain of its real estate investment properties to generate funds for share repurchases and certain debt obligations. During 2020, the Company identified nine real estate properties (eight retail properties and one industrial property) as held for sale. During the second half of 2020, five of the nine properties (four retail properties and one industrial property) were sold. Of the four remaining retail properties held for sale as of December 31, 2020, the Company sold three retail properties during the first quarter of 2021: the EcoThrift property and the two Chevron properties (see Dispositions above for more details). The Harley Davidson retail property, which was the only property held for sale as of March 31, 2021, was reclassified as held for investment and use during the second quarter of 2021 (see discussion in Change in Plan of Sale below for more details). During the second quarter of 2021, the Company identified and reclassified the industrial property located in Cedar Park, Texas leased to Dana Incorporated, but unoccupied, as real estate investment held for sale. This property was sold on July 7, 2021. The Company had no real estate investments classified as held for sale as of September 30, 2021. The following table summarizes the major components of assets and liabilities related to real estate investments held for sale as of December 31, 2020 related to the Harley Davidson, EcoThrift and two Chevron properties: December 31, Assets related to real estate investments held for sale: Land, buildings and improvements $ 25,675,459 Tenant origination and absorption costs 554,788 Accumulated depreciation and amortization (1,644,508) Real estate investments held for sale, net 24,585,739 Other assets, net 1,079,361 Total assets related to real estate investments held for sale: $ 25,665,100 Liabilities related to real estate investments held for sale: Mortgage notes payable, net $ 9,088,438 Other liabilities, net 801,337 Total liabilities related to real estate investments held for sale: $ 9,889,775 The following table summarizes the major components of rental income, expenses and impairment related to the three real estate investments held for sale as of September 30, 2020 (the property previously leased to Dinan Cars located in Morgan Hill, California, the property leased to Harley Davidson located in Bedford, Texas and the property previously leased to 24 Hour Fitness located in Las Vegas, Nevada), which were included in continuing operations for the three and nine months ended September 30, 2020: Three Months Ended September 30, Nine Months Ended September 30, 2020 2020 Total revenues $ 366,673 $ 2,004,279 Expenses: Interest expense 169,871 554,009 Depreciation and amortization 145,695 554,036 Other expenses 143,173 414,115 Impairment — 10,097,710 Total expenses 458,739 11,619,870 Net loss $ (92,066) $ (9,615,591) Change in Plan of Sale On September 30, 2020, the Company reclassified the Harley Davidson property’s net book value (“NBV”) of $12,010,919 to real estate held for sale and suspended recording depreciation for the property as of that date. On December 31, 2020, the Company recorded an impairment loss of $632,233 based on the expected net proceeds of sale of the property of $12,117,500 compared to the property's NBV combined with the outstanding straight-line rent receivable balance. Following unsuccessful efforts to sell the property at a price which would be acceptable to the Company, the Company decided to withdraw its decision to sell the property during June 2021 and reclassified the Harley Davidson property to real estate investment held for investment and use. At the time of the decision to reclassify the property to real estate investment held for investment and use in June 2021, the carrying value of the property would have been $11,779,687 if continuously depreciated since September 30, 2020. The fair value of the property as of the June 2021 determination was $11,860,000, based on management’s value for the property in the June 30, 2021 NAV analysis (the most recent valuation at the time of the decision). As provided by ASC 360-10, since the adjusted carrying value of the property of $11,779,687 was lower than its fair value of $11,860,000, the Company adjusted the net book value of the property to its adjusted carrying value of $11,779,687. The recording of the property at its adjusted carrying value resulted in an adjustment to reduce the impairment loss recorded as of December 31, 2020 by $400,999 during the second quarter of 2021. |
INVESTMENT IN UNCONSOLIDATED EN
INVESTMENT IN UNCONSOLIDATED ENTITY | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT IN UNCONSOLIDATED ENTITY | INVESTMENT IN UNCONSOLIDATED ENTITY The Company’s investment in unconsolidated entity as of September 30, 2021 and December 31, 2020 is as follows: September 30, December 31, The TIC Interest $ 9,977,144 $ 10,002,368 The Company’s income from investment in unconsolidated entity for the three and nine months ended September 30, 2021 and 2020 is as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 The TIC Interest $ 75,403 $ 92,617 $ 222,705 $ 239,028 TIC Interest During 2017, the Company, through a wholly-owned subsidiary of the Operating Partnership, acquired an approximate 72.7% interest in an industrial property in Santa Clara, California. The remaining approximate 27.3% of undivided interest in the Santa Clara property is held by Hagg Lane II, LLC (an approximate 23.4% interest) and Hagg Lane III, LLC (an approximate 3.9% interest). The manager of both Hagg Lane II, LLC and Hagg Lane III, LLC became a member of the Company's board of directors in December 2019. The Santa Clara property does not qualify as a variable interest entity and consolidation is not required as the Company’s TIC Interest does not control the property. Therefore, the Company accounts for the TIC Interest using the equity method. The Company receives approximately 72.7% of the cash flow distributions and recognizes approximately 72.7% of the results of operations. During the three months ended September 30, 2021 and 2020, the Company received $85,962 and $207,950 in cash distributions, respectively, and $247,929 and $542,140 during the nine months ended September 30, 2021 and 2020, respectively. The following is summarized financial information for the Santa Clara property as of September 30, 2021 and December 31, 2020 and for the three and nine months ended September 30, 2021 and 2020: September 30, December 31, Assets: Real estate investments, net $ 29,510,151 $ 29,906,146 Cash and cash equivalents 670,458 380,774 Other assets 176,583 164,684 Total assets $ 30,357,192 $ 30,451,604 Liabilities: Mortgage note payable, net $ 13,287,876 $ 13,489,126 Below-market lease, net 2,697,183 2,806,973 Other liabilities 343,815 92,777 Total liabilities 16,328,874 16,388,876 Total equity 14,028,318 14,062,728 Total liabilities and equity $ 30,357,192 $ 30,451,604 Three Months Ended Nine Months Ended 2021 2020 2021 2020 Total revenues $ 683,160 $ 697,851 $ 2,034,072 $ 2,047,424 Expenses: Interest expense 138,616 141,935 414,258 424,544 Depreciation and amortization 250,754 250,015 750,784 749,913 Other expenses 190,086 178,522 562,738 544,225 Total expenses 579,456 570,472 1,727,780 1,718,682 Net income $ 103,704 $ 127,379 $ 306,292 $ 328,742 |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill, Net The changes in carrying value of goodwill as of September 30, 2021 and December 31, 2020 are as follows: September 30, December 31, Beginning balance $ 17,320,857 $ 50,588,000 Impairment of goodwill for the nine and the 12 months period ended, respectively — (33,267,143) Ending balance $ 17,320,857 $ 17,320,857 The current COVID-19 pandemic in the United States and globally, and the magnitude and uncertain duration of the economic impacts, have resulted in challenges in attracting investor equity during this period of economic weakness and volatility. The disruption in the Company's Offerings had a protracted impact on capital raising, and the recessionary pressures on the economy resulted in real estate market uncertainty and an approximate 14% decrease in the estimated fair value of the Company’s real estate properties as of April 30, 2020 as compared with the estimated fair value of the Company’s real estate properties as of December 31, 2019. Given these circumstances, the Company revised its capital raise projections, its projections of new investment and other factors contributing to the Company's analysis of estimated fair value of its consolidated business operations as of September 30, 2020. Since the Company is a single reporting unit, the Company performed a quantitative analysis to compare the estimated fair value of the Company’s net tangible and intangible assets to the carrying value of its net tangible and intangible assets as of September 30, 2020. Since the estimated fair value of the Company’s net tangible and intangible assets was less than the carrying amount of its net tangible and intangible assets, the Company recorded a goodwill impairment charge of $33,267,143, which was reflected in the Company’s net loss for the nine months ended September 30, 2020. The Company conducted its annual impairment analysis as of December 31, 2020 using qualitative factors and concluded that no additional impairment to goodwill was necessary. Management did not identify any triggering events for the nine months ended September 30, 2021 and therefore a qualitative assessment was not required. Intangible Assets, Net The following table sets forth the Company's intangible assets, net as of September 30, 2021 and December 31, 2020 and their related useful lives: Intangible Assets Useful Life September 30, December 31, Investor list, net 5.0 years $ 3,494,740 $ 3,494,740 Web services technology, domains and licenses 3.0 years 3,661,852 3,466,102 7,156,592 6,960,842 Accumulated amortization (3,230,583) (1,833,054) Net $ 3,926,009 $ 5,127,788 Amortization expense for the three months ended September 30, 2021 and 2020 amounted to $471,790 and $446,921, respectively, and for the nine months ended September 30, 2021 and 2020 amounted to $1,397,529 and $1,372,910, respectively. As discussed above, the COVID-19 pandemic caused significant disruptions in the economy and uncertainties in the investment markets. Based on the impacts on the Company's investors and the economy, the Company evaluated the fair value of intangibles to determine if they exceeded the respective carrying values and determined that a portion of the investor list would no longer be viable and, therefore, the Company recorded an impairment charge of $1,305,260, which was reflected in the Company’s net loss for the nine months ended September 30, 2020. |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS DETAILS | 9 Months Ended |
Sep. 30, 2021 | |
Supplemental Balance Sheet Disclosure [Abstract] | |
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS DETAILS | UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS DETAILS Tenant Receivables, Net Tenant receivables consisted of the following: September 30, December 31, Straight-line rent $ 5,399,340 $ 4,344,388 Tenant rent 98,363 204,775 Tenant reimbursements 1,849,245 2,116,627 Total $ 7,346,948 $ 6,665,790 Accounts Payable, Accrued and Other Liabilities Accounts payable, accrued and other liabilities were comprised of the following: September 30, December 31, Accounts payable $ 1,214,828 $ 1,136,954 Accrued expenses 3,575,331 3,068,714 Accrued distributions 786,120 706,106 Accrued interest payable 611,507 629,628 Unearned rent 1,591,992 2,033,065 Lease incentive obligation 2,133,695 5,157 Total $ 9,913,473 $ 7,579,624 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Mortgage Notes Payable, Net As of September 30, 2021 and December 31, 2020, the Company’s mortgage notes payable consisted of the following: Collateral 2021 Principal 2020 Principal Contractual Interest Effective Loan Accredo property $ 8,538,000 $ 8,538,000 3.80% 3.80% 8/1/2025 Six Dollar General properties 3,693,074 3,747,520 4.69% 4.69% 4/1/2022 Dana property — 4,466,865 4.56% 4.56% 4/1/2023 Northrop Grumman property (8) 6,971,012 5,518,589 3.35% 3.35% 5/21/2031 exp US Services property 3,272,333 3,321,931 (4) 4.25% 11/17/2024 Harley Davidson property (2) 6,525,824 — 4.25% 4.25% 9/1/2024 Wyndham property (3) 5,522,100 5,607,000 One-month LIBOR + 2.05% 4.34% 6/5/2027 Williams Sonoma property (3) 4,368,000 4,438,200 One-month LIBOR + 2.05% 4.34% 6/5/2022 Omnicare property 4,130,640 4,193,171 4.36% 4.36% 5/1/2026 EMCOR property 2,771,646 2,811,539 4.35% 4.35% 12/1/2024 Husqvarna property 6,379,182 6,379,182 (5) 4.60% 2/20/2028 AvAir property 19,950,000 19,950,000 3.80% 3.80% 8/1/2025 3M property 8,058,500 8,166,000 One-month LIBOR + 2.25% 5.09% 3/29/2023 Cummins property 8,222,700 8,332,200 One-month LIBOR + 2.25% 5.16% 4/4/2023 Texas Health property 4,304,825 4,363,203 4.00% 4.00% 12/5/2024 Bon Secours property 5,124,127 5,180,552 5.41% 5.41% 9/15/2026 Costco property 18,850,000 18,850,000 4.85% 4.85% 1/1/2030 Taylor Fresh Foods 12,350,000 12,350,000 3.85% 3.85% 11/1/2029 Levins property (6) 2,671,067 2,032,332 3.75% 3.75% 2/16/2026 Dollar General Bakersfield property (6) 2,244,201 2,268,922 3.65% 3.65% 2/16/2028 Labcorp property (6) 5,342,133 4,020,418 3.75% 3.75% 2/16/2026 GSA (MSHA) property (6) 1,728,428 1,752,092 3.65% 3.65% 2/16/2026 PreK Education property (7) 4,957,705 5,037,846 4.25% 4.25% 12/1/2021 Solar Turbines, Amec Foster, ITW Rippey properties (7) 9,044,276 9,214,700 3.35% 3.35% 11/1/2026 Dollar General Big Spring property (7) 590,962 599,756 4.50% 4.50% 4/1/2022 Gap property (7) 3,512,484 3,569,990 4.15% 4.15% 8/1/2023 L3Harris property (8) 6,260,223 5,185,929 3.35% 3.35% 5/21/2031 Sutter Health property (7) 13,669,395 13,879,655 4.50% 4.50% 3/9/2024 Walgreens property (7) 3,094,060 3,172,846 4.25% 4.25% 7/16/2030 Total mortgage notes payable 182,146,897 176,948,438 Plus unamortized mortgage premium, net (9) 239,979 447,471 Less unamortized deferred financing costs (1,472,537) (1,469,991) Mortgage notes payable, net $ 180,914,339 $ 175,925,918 (1) Contractual interest rate represents the interest rate in effect under the mortgage note payable as of September 30, 2021. Effective interest rate is calculated as the actual interest rate in effect as of September 30, 2021, consisting of the contractual interest rate and the effect of the interest rate swap, if applicable (see Note 8 for further information regarding the Company’s derivative instruments) . (2) Reclassified to mortgage note payable at June 30, 2021 from mortgage note payable related to real estate investments held for sale as of December 31, 2020 due to a subsequent decision not to sell the real estate investment property securing the loan which was reclassified back to assets held and used from assets held for sale (see Note 3 for additional information). (3) The loans on each of the Williams Sonoma and Wyndham properties (collectively, the “Property”) located in Summerlin, Nevada were originated by Nevada State Bank (“Bank”). The loans are collateralized by a deed of trust and a security agreement with assignment of rents and fixture filing. In addition, the individual loans are subject to a cross collateralization and cross default agreement whereby any default under, or failure to comply with the terms of any one or both of the loans, is an event of default under the terms of both loans. The value of the Property must be in an amount sufficient to maintain a loan to value ratio of no more than 60%. If the loan to value ratio is ever more than 60%, the borrower shall, upon the Bank’s written demand, reduce the principal balance of the loans so that the loan to value ratio is no more than 60%. (4) The initial contractual interest rate is 4.25% and starting November 18, 2022, the interest rate becomes the U.S. Treasury Bill index rate plus 3.25%. (5) The initial contractual interest rate is 4.60% through February 20, 2023 and then the greater of 4.60% or five-year Treasury Constant Maturity (“TCM”) plus 2.45% through February 20, 2028. (6) The mortgage note as of September 30, 2021 was refinanced on March 5, 2021 with a new lender and terms. The mortgage note as of December 31, 2020 was acquired through the Merger on December 31, 2019. (7) The loan was acquired through the Merger on December 31, 2019. (8) The loans on the Northrop Grumman and L3Harris properties were refinanced during the second quarter of 2021. The initial contractual interest rate is 3.35% through June 1, 2026 and then the Prime Rate in effect as of June 1, 2026 plus 0.25% through May 21, 2031; provided that the second fixed interest rate will not be lower than 3.35% per annum. (9) Represents unamortized net mortgage premium acquired through the Merger. The following summarizes the face value, carrying amount and fair value of the Company’s mortgage notes payable (Level 3 measurement) as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Face Value Carrying Fair Value Face value Carrying Fair Value Mortgage notes payable $ 182,146,897 $ 180,914,339 $ 183,304,467 $ 176,948,438 $ 175,925,918 $ 177,573,106 Disclosures of the fair values of financial instruments are based on pertinent information available to the Company as of the period end and require a significant amount of judgment. The actual value could be materially different from the Company’s estimate of fair value. Mortgage Notes Payable Related to Real Estate Investments Held For Sale, Net As discussed in detail in Note 3 , the Company classified two properties as real estate held for sale as of December 31, 2020, which were collateral for mortgage notes payable. No properties were classified as held for sale as of September 30, 2021. The following table summarizes the Company's mortgage notes payable related to real estate investments held for sale as of December 31, 2020: Collateral December 31, Harley Davidson property $ 6,623,346 EcoThrift property 2,573,509 Total 9,196,855 Plus unamortized mortgage premium 1,550 Less deferred financing costs (109,967) Mortgage notes payable, net $ 9,088,438 Credit Facility, Net The details of the Company's credit facilities as of September 30, 2021 and December 31, 2020 follow: September 30, December 31, Credit facility $ — $ 6,000,000 Less unamortized deferred financing costs — (21,724) Credit facility, net $ — $ 5,978,276 On March 29, 2021, the Company entered into a new credit facility with Banc of California (the “Credit Facility”) for an aggregate line of credit of $22,000,000 with a maturity date of March 30, 2023, which replaced the prior credit facility provided by Pacific Mercantile Bank (“PMB”) with a balance outstanding of $6,000,000 as of December 31, 2020. The Company borrowed $6,000,000 under the Credit Facility and repaid the $6,000,000 that was owed to PMB on March 31, 2021. The Credit Facility provides the Company with a $17,000,000 revolving line of credit for real estate acquisitions (including the $6,000,000 borrowed to repay PMB) and an additional $5,000,000 revolving line of credit for working capital. Under the terms of the Credit Facility, the Company will pay a variable rate of interest on outstanding amounts equal to one percentage point over the prime rate published in The Wall Street Journal, provided that the interest rate in effect on any one day shall not be less than 4.75% per annum. The Company paid Banc of California origination fees of $77,000 in connection with the Credit Facility and will pay an unused commitment fee of 0.15% per annum of the unused portion of the Credit Facility, charged quarterly in arrears based on the average unused commitment available under the Credit Facility. The Credit Facility's unamortized deferred financing costs of $97,092 as of September 30, 2021 were reclassified and presented under prepaid and other assets in the Company's unaudited condensed consolidated balance sheet as of September 30, 2021. Effective December 31, 2021, the Company will present the Credit Facility's unamortized deferred financing costs for the comparative periods under prepaid and other assets in the consolidated balance sheets and will disclose the unamortized values in the consolidated notes to the financial statements. The Credit Facility is secured by substantially all of the Company’s tangible and intangible assets, including intellectual property. The Credit Facility requires the Company to maintain a minimum debt service coverage ratio of 1.25 to 1.00 and minimum tangible NAV (as defined in the loan agreement) of $120,000,000, measured quarterly. Mr. Wirta, the Company’s Chairman, and the Wirta Family Trust guaranteed the $6,000,000 initial borrowing, which guarantee expired upon the full repayment of the $6,000,000 in August 2021. Mr. Wirta and the Wirta Family Trust have also guaranteed the $5,000,000 revolving line of credit for working capital. On March 29, 2021, the Company entered into an updated indemnification agreement with Mr. Wirta and the Wirta Family Trust with respect to their guarantees of borrowings under the Credit Facility pursuant to which the Company agreed to indemnify Mr. Wirta and the Wirta Family Trust if they are required to make payments to Banc of California pursuant to such guarantees. The Credit Facility contains customary representations, warranties and covenants, which are substantially similar to those in the Company's prior credit facility provided by PMB. The Company’s ability to borrow under the Credit Facility will be subject to its ongoing compliance with various affirmative and negative covenants, including with respect to indebtedness, guaranties, mergers and asset sales, liens, tangible net worth, corporate existence and financial reporting obligations. The Credit Facility also contains customary events of default, including, without limitation, nonpayment of principal, interest, fees or other amounts when due, violation of covenants, breaches of representations or warranties and change of ownership. Upon the occurrence of an event of default, Banc of California may accelerate the repayment of amounts outstanding under the Credit Facility, take possession of any collateral securing the Credit Facility and exercise other remedies subject, in certain instances, to the expiration of an applicable cure period. Short-term Notes Payable In connection with the Self-Management Transaction, the Company assumed from BrixInvest its unsecured short-term notes payable (formerly known as “Convertible Promissory Notes”) of $4,800,000 on December 31, 2019. All of these notes were repaid by April 6, 2020. Economic Relief Notes Payable On April 20, 2020, a subsidiary of the Company entered into a loan agreement and promissory note evidencing an unsecured loan in the aggregate amount of $517,000 made to this subsidiary under the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The PPP is administered by the U.S. Small Business Administration (the “SBA”). Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of the loan granted under the PPP. In December 2020, the subsidiary of the Company submitted its application for forgiveness of the total amount of the loan to PMB. After PMB’s review, the Company updated its forgiveness application on February 10, 2021, PMB submitted the application to the SBA on February 10, 2021, and on February 16, 2021, the subsidiary of the Company was notified by PMB that the Company's application for forgiveness of the PPP loan had been approved by the SBA in the full amount of $517,000. Accordingly, the forgiveness of the PPP loan was recorded as other income in the first quarter of 2021. Compliance with All Debt Agreements The Company's maximum leverage, as defined and approved by the board of directors, including all of the independent directors, is 55% of the aggregate value of the Company’s tangible assets. The Company uses available leverage based on the relative cost of debt and equity capital, and to address strategic borrowing advantages potentially available to the Company. Pursuant to the terms of mortgage notes payable on certain of the Company’s properties and the Credit Facility, the Company and/or the borrowers are subject to certain financial loan covenants. The Company and/or the borrowers were in compliance with such financial loan covenants as of September 30, 2021. The following summarizes the future principal repayments of the Company’s mortgage notes payable and credit facility as of September 30, 2021: Mortgage Notes Credit Facility Total October through December 2021 $ 5,578,530 $ — $ 5,578,530 2022 11,173,350 — 11,173,350 2023 22,204,003 — 22,204,003 2024 31,565,888 — 31,565,888 2025 28,970,170 — 28,970,170 2026 26,484,067 — 26,484,067 Thereafter 56,170,889 — 56,170,889 Total principal 182,146,897 — 182,146,897 Plus unamortized mortgage premium, net of unamortized discount 239,979 — 239,979 Less deferred financing costs (1,472,537) — (1,472,537) Net principal $ 180,914,339 $ — $ 180,914,339 Interest Expense The following is a reconciliation of the components of interest expense for the three and nine months ended September 30, 2021 and 2020: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Mortgage notes payable: Interest expense $ 1,812,254 $ 2,154,363 $ 5,638,890 $ 6,454,546 Amortization of deferred financing costs and mortgage premium, net 141,235 435,179 355,661 693,810 Prepayment penalties — 190,574 23,900 237,574 (Gain) loss on interest rate swaps (1) (166,539) (231,207) (586,782) 1,164,490 Credit facilities: Interest expense 27,486 128,333 169,571 449,791 Amortization of deferred financing costs 16,605 42,288 60,468 117,624 Other 504 12,998 49,622 78,226 Total interest expense $ 1,831,545 $ 2,732,528 $ 5,711,330 $ 9,196,061 (1) Includes unrealized (gain) loss on interest rate swaps of $(166,338) and $(272,912) for the three months ended September 30, 2021 and 2020, respectively, and $(684,057) and $1,019,840 for the nine months ended September 30, 2021 and 2020, respectively (see Note 8 for more details). Accrued interest payable of $54,980 and $45,636 as of September 30, 2021 and December 31, 2020, respectively, represents the unsettled portion of the interest rate swaps for the period from origination of the interest rate swap through the respective balance sheet dates. |
INTEREST RATE SWAP DERIVATIVES
INTEREST RATE SWAP DERIVATIVES | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
INTEREST RATE SWAP DERIVATIVES | INTEREST RATE SWAP DERIVATIVES The Company, through its limited liability company subsidiaries, entered into interest rate swap agreements with amortizing notional amounts relating to four of its mortgage notes payable. Four additional swap agreements assumed in conjunction with the Merger which were in place as of December 31, 2020 were terminated in due course or were terminated in connection with asset sales and refinancings during the nine months ended September 30, 2021. The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks. The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of September 30, 2021 and December 31, 2020, respectively: September 30, 2021 December 31, 2020 Derivative Number of Instruments Notional Reference Weighted Average Fixed Pay Rate Weighted Number Notional Reference Weighted Average Fixed Pay Rate Weighted Interest Rate Swap Derivatives (iv) 4 $ 26,171,300 One-month LIBOR + applicable spread/Fixed at 4.05%-5.16% 4.53 % 2.3 years 8 $ 36,617,164 One-month LIBOR + applicable spread/Fixed at 3.13%-5.16% 3.35 % 2.2 years (i) The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The minimum notional amounts (outstanding principal balance at the maturity date) as of September 30, 2021 and December 31, 2020 were $24,935,999 and $34,989,063, respectively. (ii) The reference rate was as of September 30, 2021. (iii) The reference rate was as of December 31, 2020. (iv) During the three months ended September 30, 2020, the Company terminated the swap agreements related to the Rite Aid and Island Pacific properties at aggregate costs of $52,200. No termination of swap agreements were made during the three months ended September 30, 2021. During the nine months ended September 30, 2021 and 2020, the Company terminated swap agreements related to the GSA and Eco-Thrift properties at aggregate costs of $23,900 and terminated the swap agreements related to the Dinan, Rite Aid and Island Pacific properties at aggregate costs of $99,200, respectively. The following table sets forth the fair value of the Company’s derivative instruments (Level 2 measurement), as well as their classification in the unaudited condensed consolidated balance sheets: September 30, 2021 December 31, 2020 Derivative Instrument Balance Sheet Location Number of Fair Value Number of Fair Value Interest Rate Swaps Asset - Interest rate swap derivatives, at fair value — $ — — $ — Interest Rate Swaps Liability - Interest rate swap derivatives, at fair value 4 $ (1,073,998) 8 $ (1,743,889) The change in fair value of a derivative instrument that is not designated as a cash flow hedge for financial accounting purposes is recorded as interest expense in the unaudited condensed consolidated statements of operations. None of the Company’s derivatives at September 30, 2021 or December 31, 2020 were designated as hedging instruments; therefore, the net unrealized (gain) loss recognized on interest rate swaps of $(166,338) and $(272,912) was recorded as a decrease in interest expense for the three months ended September 30, 2021 and 2020, respectively, and $(684,057) and $1,019,840 was recorded as a (decrease) increase in interest expense for the nine months ended September 30, 2021 and 2020, respectively. |
PREFERRED STOCK
PREFERRED STOCK | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
PREFERRED STOCK | PREFERRED STOCK Preferred Stock The Company is authorized to issue up to 50,000,000 shares of preferred stock. In connection with an underwritten public offering in September 2021 (discussed below in detail), the Company classified and designated 2,000,000 shares of its authorized preferred stock as authorized shares of Series A Preferred Stock. As of September 30, 2021, 2,000,000 shares of authorized Series A Preferred Stock were issued and outstanding. Underwritten Offering - Series A Preferred Stock On September 14, 2021, the Company and the Operating Partnership entered into the Underwriting Agreement with the Underwriters, pursuant to which the Company agreed to issue and sell 1,800,000 shares of the Company’s Series A Preferred Stock, with a liquidation preference of $25.00 per share, in the Preferred Offering at a price per share of $25.00. In addition, the Company granted the Underwriters a 30-day option to purchase up to an additional 200,000 shares of the Series A Preferred Stock, which the Underwriters exercised in full on September 16, 2021. In the Underwriting Agreement, the Company and the Operating Partnership made certain customary representations, warranties and covenants and agreed to indemnify the Underwriters against certain liabilities. The issuance and sale of the shares of Series A Preferred Stock, including the issuance and sale of 200,000 shares pursuant to the Underwriters’ full exercise of their option to purchase additional shares, closed on September 17, 2021. The gross proceeds from the Preferred Offering were $50,000,000 and the net proceeds were $47,570,374, after deducting the underwriting discount of $1,575,000 and other offering costs of $854,626. The Company contributed the net proceeds from the Preferred Offering to the Operating Partnership in exchange for a new class of 7.375% Series A Cumulative Redeemable Perpetual Preferred Units of the Operating Partnership (the “Series A Preferred Units”), which have economic interests that are substantially similar to the designations, preferences and other rights of Series A Preferred Stock. The Company, acting through the Operating Partnership, intends to use the net proceeds from such contribution for general corporate purposes, which is expected to include purchases of additional properties and other real estate and real estate-related assets (see Note 13 for pending real estate investment acquisitions). Series A Preferred Stock - Terms Holders of Series A Preferred Stock are entitled to cumulative dividends in the amount of $1.84375 per share each year, which is equivalent to the rate of 7.375% of the $25.00 liquidation preference per share per annum. The Series A Preferred Stock has no stated maturity and will remain outstanding indefinitely unless redeemed, converted or otherwise repurchased. Except in limited circumstances relating to the Company's qualification as a REIT for U.S. federal income tax purposes, and as described in the articles supplementary governing the terms of the Series A Preferred Stock (the “Articles Supplementary”), the Series A Preferred Stock is not redeemable prior to September 17, 2026. On and after September 17, 2026, at any time and from time to time, the Series A Preferred Stock will be redeemable in whole or in part, at the Company's option, at a cash redemption price of $25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date. In addition, upon the occurrence of a Delisting Event or a Change of Control (each as defined in the Articles Supplementary), the Company may, subject to certain conditions, at its option, redeem the Series A Preferred Stock, in whole or in part, (i) after the first date on which the Delisting Event occurred or (ii) on, or within 120 days after, the first date on which the Change of Control occurred, as applicable, by paying the liquidation preference of $25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date. Upon the occurrence of a Change of Control during a continuing Delisting Event, unless the Company has elected to exercise its redemption right, holders of the Series A Preferred Stock will have certain rights to convert the Series A Preferred Stock into shares of the Company’s Class C common stock. In addition, upon the occurrence of a Delisting Event, the dividend rate will be increased on the day after the occurrence of the Delisting Event by 2.00% per annum to the rate of 9.375% of the $25.00 liquidation preference per share per annum (equivalent to $2.34375 per share each year) from and after the date of the Delisting Event. Following the cure of such Delisting Event, the dividend rate will revert to the rate of 7.375% of the $25.00 liquidation preference per share per annum. The necessary conditions to convert the Series A Preferred Stock into the Company's Class C common stock have not been met as of September 30, 2021. Therefore, the Series A Preferred Stock did not impact the Company’s earnings per share calculations for the three and nine months ended September 30, 2021. The Series A Preferred Stock ranks senior to the Company's Class C common stock and Class S common stock, with respect to dividend rights and rights upon Company’s or voluntary or involuntary liquidation, dissolution or winding up. Voting rights for holders of Series A Preferred Stock exist primarily with respect to the ability to elect two additional directors to the board of directors if six or more quarterly dividends (whether or not authorized or declared or consecutive) payable on the Series A Preferred Stock are in arrears, and with respect to voting on amendments to the Company’s charter (which includes the Articles Supplementary) that materially and adversely affect the rights of the Series A Preferred Stock or create additional classes or series of shares of the Company’s capital stock that are senior to the Series A Preferred Stock. Other than the limited circumstances described above and in the Articles Supplementary, holders of Series A Preferred Stock do not have any voting rights. Series A Preferred Stock Dividend Dividends on the Company's Series A Preferred Stock accrue in an amount equal to $1.84375 per share each year ($0.460938 per share per quarter) to holders of Series A Preferred Stock, which is equivalent to 7.375% of the $25.00 liquidation preference per share per annum. Dividends on the Series A Preferred Stock are cumulative and payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record on applicable record date. The first quarterly dividend for the Series A Preferred Stock sold in the Preferred Offering will be paid on January 15, 2022 and will represent an accrual for more than a full quarter, covering the period from September 17, 2021 to, and including, December 31, 2021. As of September 30, 2021, the Company has accrued dividends of $143,403. Any accrued and unpaid dividends payable with respect to the Series A Preferred Stock become part of the liquidation preference thereof. On November 11, 2021, the Company’s board of directors declared Series A Preferred Stock distributions payable of $1,065,278 for the fourth quarter of 2021, including the $143,403 of accrued dividends as of September 30, 2021, which are payable on January 15, 2022 (see Note 13 ). |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Company pays the members of its board of directors who are not executive officers for services rendered through cash payments or by issuing shares of Class C common stock to them. The total fees incurred for board services and paid by the Company for the three and nine months ended September 30, 2021 and 2020, is as follows: Three Months Ended Nine Months Ended Board of Directors Compensation 2021 2020 2021 2020 Cash paid for services rendered $ 25,000 $ 18,750 $ 85,000 $ 50,000 Value of shares issued for services rendered 95,000 82,500 275,000 255,833 Total $ 120,000 $ 101,250 $ 360,000 $ 305,833 Number of shares issued for services rendered (*) 3,647 3,929 12,168 11,022 * Adjusted for the 1:3 reverse stock split for the three and nine months ended September 30, 2020. As of September 30, 2020, $101,250 was accrued for the second quarter of 2020 services. This amount was paid in July 2020 by paying cash of $31,250 and issuing 4,821 shares of Class C common stock (adjusted for the 1:3 reverse stock split). Related Party Transactions with Unconsolidated Entities The Company's taxable REIT subsidiary serves as the asset manager of the TIC Interest property and earned asset management fees of $47,984 for both the three months ended September 30, 2021 and 2020, respectively, and $95,967 for both the nine months ended September 30, 2021 and 2020, respectively. Transactions with Other Related Parties Effective February 3, 2020, the Company's indirect subsidiary, Modiv Advisors, LLC, became the advisor to BRIX REIT, Inc., a REIT originally sponsored by BrixInvest, which also sponsored the Company until the Self-Management Transaction on December 31, 2019. During the three and nine months ended September 30, 2021 and 2020, no business transactions occurred between the Company and BRIX REIT, Inc. other than minor expenses advanced. On March 2, 2020, the Company borrowed a total of $4,000,000, secured by mortgages on its two Chevron properties, from the Company's Chairman, Mr. Wirta. The Company's conflicts committee approved the terms of these mortgages which bore interest at an annual rate of 8% and were scheduled to mature on June 2, 2020. On June 1, 2020, the maturity date of these mortgages was extended to September 1, 2020 on the same terms, along with an option for a further extension to November 30, 2020 at the Company’s election prior to August 18, 2020, which the Company elected not to exercise. On July 31, 2020 and August 28, 2020, the mortgages secured by the Chevron San Jose, California property and Chevron Roseville, California property, each for $2,000,000, were repaid along with all related accrued interest. Due to Affiliates In connection with the Self-Management Transaction, the Company assumed two notes payable aggregating $630,820 on December 31, 2019 owed to Mr. Wirta, the Company's Chairman. The notes payable had identical terms including a fixed interest rate of 10% paid semi-monthly and a maturity date of April 23, 2020. The remaining principal amount of $218,931 due for each note, aggregating $437,862, was paid on the maturity date. The repayments are reflected in the change in due to affiliates in the accompanying unaudited statement of cash flows for the nine months ended September 30, 2020. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the property could result in future environmental liabilities. Tenant Improvements Pursuant to lease agreements, as of September 30, 2021 and December 31, 2020, the Company had obligations to pay $189,136 and $60,598, respectively, for on-site and tenant improvements to be incurred by tenants. As of September 30, 2021 and December 31, 2020, the Company had $2,271,462 and $92,684 of restricted cash held to fund other building improvements, tenant improvements and leasing commissions. Redemption of Common Stock The Company has a share repurchase program that enables qualifying stockholders to sell their Class C common stock or Class S common stock to the Company in limited circumstances. The maximum amount of common stock that may be repurchased per month is limited to no more than 2% of the Company’s most recently determined aggregate NAV. Repurchases for any calendar quarter are limited to no more than 5% of its most recently determined aggregate NAV. The foregoing repurchase limitations are based on “net repurchases” during a quarter or month, as applicable. Thus, for any given calendar quarter or month, the maximum amount of repurchases during that quarter or month will be equal to (1) 5% or 2% (as applicable) of the Company’s most recently determined aggregate NAV, plus (2) proceeds from sales of new shares in the Registered Offerings and Class S Offering (including purchases pursuant to its Registered DRP Offering) since the beginning of a current calendar quarter or month, less (3) repurchase proceeds paid since the beginning of the current calendar quarter or month. The Company has the discretion to repurchase fewer shares than have been requested to be repurchased in a particular month or quarter, or to repurchase no shares at all, in the event that it lacks readily available funds to do so due to market conditions beyond the Company’s control, it needs to maintain liquidity for its operations, or because the Company determines that investing in real property or other investments is a better use of its capital than repurchasing its shares. In the event that the Company repurchases some but not all of the shares submitted for repurchase in a given period, shares submitted for repurchase during such period will be repurchased on a pro-rata basis, subject to any Extraordinary Circumstance Repurchase (defined below). The Company has the discretion, but not the obligation, under extraordinary market or economic circumstances, to make a special repurchase in equal, nominal quantities of shares from all stockholders who have submitted share repurchase requests during the period (“Extraordinary Circumstance Repurchase”). Extraordinary Circumstance Repurchases will precede any pro rata share repurchases that may be made during the period. As further discussed in Note 13, on November 4, 2021, the Company’s board of directors approved management’s recommendation to terminate the Company's Class C and Class S share repurchase programs and the Company does not plan to make any further share repurchases. Legal Matters From time-to-time, the Company may become party to legal proceedings that arise in the ordinary course of its business. Other than as described below, the Company is not a party to any legal proceeding, nor is the Company aware of any pending or threatened litigation that could have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably. On September 18, 2019, a lawsuit was filed in the Superior Court of the State of California, County of Los Angeles (the “State Court Action”), against the former advisor by Clay Kramer, one of the former advisor's former employees. Kramer was previously the former advisor's Chief Digital Officer, who along with six other employees was subject to a reduction in force, communicated to all in advance, that was a result of financial constraints of the former advisor which necessitated the elimination of numerous job positions in May 2019. In the lawsuit, Kramer claims he was terminated in retaliation for his purported whistleblowing with respect to alleged attempts to plagiarize materials and for alleged misleading statements made by the former advisor. In September 2020, the State Court Action was removed to the United States District Court, Central District of California (“U.S. District Court”). On June 14, 2021, the U.S. District Court scheduled a jury trial commencing April 11, 2022 and depositions and discovery are in process. The Company is not a party to the lawsuit. The former advisor has denied all the accusations and allegations in the complaint and the former advisor intends to vigorously defend against the claims made by the plaintiff. |
OPERATING PARTNERSHIP UNITS
OPERATING PARTNERSHIP UNITS | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
OPERATING PARTNERSHIP UNITS | OPERATING PARTNERSHIP UNITS Class M OP Units On September 19, 2019, the Company, the Operating Partnership, BrixInvest and Daisho OP Holdings, LLC, a formerly wholly owned subsidiary of BrixInvest (“Daisho”) which was spun off from BrixInvest on December 31, 2019, entered into the Contribution Agreement pursuant to which the Company agreed to acquire substantially all of the net assets of BrixInvest in exchange for 657,949.5 Class M OP Units in the Operating Partnership and assumed certain liabilities. The consideration transferred as of December 31, 2019 was determined to have a fair value of $50,603,000 based on a probability weighted analysis of achieving the requisite assets under management (“AUM”) and adjusted funds from operations (“AFFO”) hurdles. The Class M OP Units were issued to Daisho on December 31, 2019 in connection with the Self-Management Transaction and are non-voting, non-dividend accruing, and were not able to be converted or exchanged prior to the one-year anniversary of the Self-Management Transaction. Investors holding units in BrixInvest received Daisho units in a ratio of 1:1 for an aggregate of 657,949.5 Daisho units. During 2020, Daisho distributed the Class M OP Units to its members. The Class M OP Units are convertible into Class C OP Units at a conversion ratio of 1.6667 Class C OP Units for each one Class M OP Unit (adjusted for the 1:3 reverse stock split on February 1, 2021), subject to a reduction in the conversion ratio (which reduction will vary depending upon the amount of time held) if the exchange occurs prior to the four-year anniversary of the completion of the Self-Management Transaction. In the event that the Class M OP Units are converted into Class C OP Units prior to December 31, 2023, such Class M OP Units shall be exchanged at the rate indicated below: Date of Exchange Early Conversion Rate From December 31, 2020 to December 30, 2021 50% of the Class M conversion ratio From December 31, 2021 to December 30, 2022 60% of the Class M conversion ratio From December 31, 2022 to December 30, 2023 70% of the Class M conversion ratio The Class M OP Units are eligible for an increase in the conversion ratio (conversion ratio enhancement) if the Company achieves both of the targets for AUM and AFFO in a given year as set forth below and as adjusted for the 1:3 reverse stock split: Hurdles AUM AFFO Class M ($ in billions) Per Share ($) Conversion Ratio Initial Conversion Ratio 1:1.6667 Fiscal Year 2021 $ 0.860 $ 1.77 1:1.9167 Fiscal Year 2022 $ 1.175 $ 1.95 1:2.5000 Fiscal Year 2023 $ 1.551 $ 2.10 1:3.0000 Based on the current conversion ratio of 1.6667 Class C OP Units (adjusted for the 1:3 reverse stock split) for each one Class M OP Unit, if a Class M OP Unit is converted on or after December 31, 2023, and based on the NAV per share of $27.29 (unaudited) as of September 30, 2021, a Class M OP Unit would be valued at $45.48 (unaudited). This NAV does not reflect the early conversion rate or the future conversion enhancement ratio of the Class M OP Units and Class P OP Units, as discussed above. Class P OP Units The Company also issued a portion of the Class P OP Units described below in connection with the Self-Management Transaction. The Class P OP Units are intended to be treated as “profits interests” in the Operating Partnership, which are non-voting, non-dividend accruing, and are not able to be transferred or exchanged prior to the earlier of (1) March 31, 2024, (2) a change of control (as defined in the Third Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as amended (the “Amended OP Agreement”)), or (3) the date of the recipient's involuntary termination (as defined in the relevant award agreement for the Class P OP Units) (collectively, the “Lockup Period”). Following the expiration of the Lockup Period, the Class P OP Units are convertible into Class C OP Units at a conversion ratio of 1.6667 Class C OP Units (adjusted for the 1:3 reverse stock split) for each one Class P OP Unit; provided, however, that the foregoing conversion ratio shall be subject to increase on generally the same terms and conditions as the Class M OP Units, as set forth above. The Company issued a total of 56,029 Class P OP Units to Messrs. Aaron S. Halfacre, the Company’s Chief Executive Officer and President, and Raymond J. Pacini, the Company’s Chief Financial Officer, including 26,318 Class P OP Units issued in exchange for Messrs. Halfacre's and Pacini's agreements to forfeit a similar number of restricted units in BrixInvest in connection with the Self-Management Transaction. The remaining 29,711 Class P OP Units were issued to these executives as a portion of their incentive compensation for 2020 in connection with their entry into restrictive covenant agreements. The 29,711 Class P OP Units were valued based on the estimated NAV per share of $30.48 (unaudited and adjusted for the 1:3 reverse stock split) when issued on December 31, 2019 and the expected minimum conversion ratio of 1.6667 Class C OP Units (adjusted for the 1:3 reverse stock split) for each one Class P OP Unit, which resulted in a valuation of $1,509,319. This amount is amortized on a straight-line basis over 51 months through March 31, 2024, the expected vesting date of the units, as a periodic charge to stock compensation expense. During the three months ended September 30, 2021 and 2020, the Company amortized and charged $88,783 and $88,784, respectively, and during the nine months ended September 30, 2021 and 2020, the Company amortized and charged $266,350 and $266,350, respectively, to stock compensation expense. The unamortized value of these units was $887,835 as of September 30, 2021. Under the Amended OP Agreement, once the Class M OP Units or Class P OP Units are converted into Class C OP Units, they will be exchangeable for the Company’s shares of Class C common stock on a 1-for-1 basis, or for cash at the sole and absolute discretion of the Company. The Company recorded the ownership interests of the Class M OP Units and Class P OP Units as noncontrolling interests in the Operating Partnership, representing a combined total of approximately 13% of the equity in the Operating Partnership on December 31, 2019. Class R OP Units On January 25, 2021, the compensation committee of the Company's board of directors recommended, and the board of directors approved, the grant of 120,000 Class R OP Units to Mr. Halfacre in recognition of his voluntary reduction in his 2020 compensation plus 512,000 Class R OP Units to Mr. Halfacre as equity incentive compensation for the next three years, and the grant of 100,000 Class R OP Units to Mr. Pacini as equity incentive compensation for the next three years. An additional 348,000 Class R OP Units were granted to the rest of the employees of the Company. All Class R OP Units granted vest on January 25, 2024 and are then mandatorily convertible into Class C OP Units on March 31, 2024 at a conversion ratio of 1:1, which conversion ratio can increase to 1:2.5 Class C OP Units if the Company generates funds from operations of $1.05, or more, per weighted average fully-diluted share outstanding for the year ending December 31, 2023. The Company has initially concluded that as of each quarter end, including September 30, 2021, achieving the performance target is not deemed probable and will adjust compensation expense prospectively if achieving the enhancement is deemed probable in the future. As a result of the Company’s 1:3 reverse stock split on February 1, 2021, Mr. Halfacre’s, Mr. Pacini’s and the remaining employees’ Class R OP Units were adjusted to 210,667 Class R OP Units, 33,333 Class R OP Units and 116,000 Class R OP Units, respectively, for a total of 360,000 Class R OP Units outstanding after adjustment for the 1:3 reverse stock split on February 1, 2021. Stock compensation expense related to the 360,000 Class R OP Units is based on the estimated value per share, including a discount for the illiquid nature of the underlying equity, and will be recognized over the three-year vesting period. During the three and nine months ended September 30, 2021, 5,663 and 6,997 Class R OP Units, respectively were forfeited due to the departure of employees. During the three and nine months ended September 30, 2021, the Company amortized and charged $559,827 and $1,573,991, respectively, to stock compensation expense for the Class R OP Units since the grant date, adjusted for the reversal of the previous amortization of the forfeited units. The unamortized value of these units was $5,421,040 as of September 30, 2021. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluates subsequent events until the date the unaudited condensed consolidated financial statements are issued. Significant subsequent events are described below: Common Stock Distributions The Company paid the September 2021 distributions of $643,025 on October 25, 2021, based on the daily distribution rate of $0.00287670 per share per day of Class C and Class S common stock, which reflects an annualized distribution rate of $1.05 per share or 4.03% per share based on the Company's estimated NAV per share of $26.05 (unaudited) during September 2021. The Company plans to pay its October distributions on November 24, 2021 based on the daily distribution rate of $0.00315070 per share per day of Class C and Class S common stock, which reflects an annualized distribution rate of $1.15 per share or 4.21% per share based on the Company's estimated NAV per share of $27.29 (unaudited) as of September 30, 2021. Preferred Dividends On November 11, 2021, the Company’s board of directors declared Series A Preferred Stock distributions payable of $1,065,278 for the fourth quarter of 2021, including the $143,403 accrued dividends as of September 30, 2021, which are payable on January 15, 2022. Redeemable Common Stock Subsequent to September 30, 2021, the Company redeemed 80,614 shares of Class C common stock for $2,098,452 and no shares of Class S common stock. Updated Estimated NAV Per Share On November 4, 2021, the Company’s board of directors approved and established an updated estimated NAV per share of the Company’s Class C common stock and Class S common stock of $27.29 (unaudited) as of September 30, 2021. Additional information on the determination of the Company's updated estimated NAV per share, including the process used to determine its updated estimated NAV per share, can be found in the Company's Current Report on Form 8-K filed with the SEC on November 5, 2021. Extension of Leases Effective October 27, 2021, the Company extended the lease terms of its property located in Carlsbad, California leased to L3Harris from April 30, 2022 to April 30, 2029 for minimum annual rents increasing annually in exchange for two months of free rent, which amounted to $139,258. The Company will pay a leasing commission of $208,087 in connection with this extension. Effective October 29, 2021, the Company also extended the lease term of its property located in Dekalb, Illinois leased to 3M Company from July 31, 2022 to July 31, 2034 for minimum annual rents increasing annually. The Company will provide a tenant improvement allowance of $1,026,000 as agreed to in the lease amendment in the form of reimbursements to the tenant following receipt of supporting documents and will pay a leasing commission of $640,696 in connection with this extension. Pending Real Estate Investment Acquisitions On October 29, 2021, the Company entered into a non-binding letter of intent for a sale and leaseback transaction to acquire an industrial property which is used in the manufacturing of garage door parts and located in Archbold, Ohio for $11,460,000. The Company expects to complete this purchase in early December 2021, subject to satisfaction of customary due diligence and other conditions, and therefore no assurances can be made that the purchase will be completed within that timeframe or at all. The Company intends to use a portion of the proceeds from the Preferred Offering (see Note 9 ) to fund this potential acquisition. On November 3, 2021, the Company entered into a purchase and sale agreement to acquire a portfolio of 10 retail properties leased to Walgreens and located in Iowa, Indiana, Wisconsin, Kansas and Louisiana, subject to customary due diligence conditions. The purchase price is $63,100,000 and the Company will assume existing collateralized mortgage indebtedness of $35,048,994 (“CMBS”) upon approval of the CMBS servicer and completing the acquisition. The Company will use a portion of the proceeds from its September 2021 offering of Series A Preferred Stock (see Note 9) to fund the estimated $28,651,000 balance of the purchase price and related commissions and closing costs. The Company expects to complete this purchase prior to December 31, 2021, subject to satisfaction of customary due diligence conditions and obtaining approval of the CMBS servicer. Pending Real Estate Investment Sales On November 5, 2021, the Company entered into an agreement to sell its property in Bedford, Texas and leased to a Harley Davidson dealer for $15,300,000 to an unrelated third party subject to customary due diligence conditions. The potential buyer has 30 days to complete its due diligence and an additional 10 days thereafter to complete the potential purchase. There can be no assurances that the buyer will complete this transaction. On November 11, 2021, the Company entered into an agreement to sell three of its office properties, which have leases scheduled to expire in less than five years, for a total of $27,240,000 to an unrelated third party, subject to customary due diligence conditions. The three properties include a property in Dallas, Texas, which is leased to Texas Health, and two properties in Richmond, Virginia, which are leased to Bon Secours and Omnicare. The potential buyer has 30 days to complete its due diligence and up to an additional 60 days thereafter to complete the potential purchase. There can be no assurances that the buyer will complete this transaction. Termination of Reg A Offering and Share Repurchase Programs On November 2, 2021, the Company's board of directors reviewed and approved management’s recommendation to terminate the Company's Reg A Offering effective upon the close of business on November 24, 2021 and to seek a listing of the Company's Class C common stock on a national securities exchange in early 2022; however, there can be no assurances that such a listing can be completed in that time frame or at all. As a result, the Company expects to record an impairment charge related to its intangible assets of approximately $3,700,000 during the fourth quarter of 2021 for its intangible assets related to investor lists, website services technology, domains and licenses. These assets have been used by the Company in its crowdfunding capital-raising activities, and prior to the board of directors’ approval to seek a listing of the Company's Class C common stock on a national securities exchange, these assets were the primary mechanism through which the Company sold shares of its Class C common stock. The Company’s board of directors also approved management’s recommendation to terminate the Company's Class C and Class S share repurchase programs and the Company does not plan to make any further share repurchases. New Credit Facility On November 12, 2021, the Company and KeyBank National Association (“KeyBank”) agreed on a non-binding term sheet for a new $225,000,000 credit facility (the “Facility”) to be syndicated by KeyBank as Administrative Agent and Lead Arranger. The term sheet provides for a four-year revolving line of credit, which may be extended by up to 12 months subject to certain conditions, and a five-year term loan. The Facility is expected to be available for general corporate purposes including but not limited to acquisitions, repayment of existing indebtedness and capital expenditures. The Facility will be priced on a leverage-based pricing grid that fluctuates based on the Company’s actual leverage ratio. Closing of the Facility will be subject to customary closing conditions; however, there can be no assurances that the Facility will close. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements and the rules and regulations of the SEC. Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. Such unaudited condensed consolidated financial statements and accompanying notes are the representations of the Company’s management, which is responsible for their integrity and objectivity. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2020 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2021. |
Use of Estimates | Use of Estimates The preparation of the unaudited condensed consolidated financial statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. These estimates are based on historical experience and, in some cases, assumptions based on current and future market experience, including considerations related to the COVID-19 pandemic (see Notes 3 and 5 for impairment charges related primarily to COVID-19). Actual results may differ from those estimates. |
Noncontrolling Interests in the Operating Partnership | Noncontrolling Interests in the Operating PartnershipThe Company accounts for the noncontrolling interests in its Operating Partnership in accordance with the related accounting guidance. Due to the Company's control of the Operating Partnership through its general partnership interest therein and the limited rights of the limited partners, the Operating Partnership, including its wholly-owned subsidiaries, are consolidated with the Company, and the limited partner interests not held by the Company are reflected as noncontrolling interests in the accompanying unaudited condensed consolidated balance sheets and statements of equity. |
Business Combinations | Business Combinations The Company accounts for business combinations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”) and applicable Accounting Standards Updates (each, an “ASU”), whereby the total consideration transferred is allocated to the assets acquired and liabilities assumed, including amounts attributable to any non-controlling interests, when applicable, based on their respective estimated fair values as of the date of acquisition. Goodwill represents the excess of consideration transferred over the estimated fair value of the net assets acquired in a business combination. |
Revenue Recognition | Revenue Recognition The Company accounts for revenue in accordance with FASB ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606 ) (“ASU No. 2014-09”), which includes revenue generated by sales of real estate, other operating income and tenant reimbursements for substantial services earned at the Company’s properties. Such revenues are recognized when the services are provided and the performance obligations are satisfied. Tenant reimbursements, consisting of amounts due from tenants for common area maintenance, property taxes and other recoverable costs, are recognized in rental income subsequent to the adoption of Topic 842, as discussed below, in the period the recoverable costs are incurred. Tenant reimbursements, for which the Company pays the associated costs directly to third-party vendors and is reimbursed by the tenants, are recognized and recorded on a gross basis. The Company accounts for leases in accordance with FASB ASU No. 2016-02, Leases (Topic 842), and the related FASB ASU Nos. 2018-10, 2018-11, 2018-20 and 2019-01, which provide practical expedients, technical corrections and improvements for certain aspects of ASU No. 2016-02, on a modified retrospective basis (collectively, “Topic 842”). Topic 842 establishes a single comprehensive model for entities to use in accounting for leases. Topic 842 applies to all entities that enter into leases. Lessees are required to report assets and liabilities that arise from leases. Lessor accounting has largely remained unchanged; however, certain refinements were made to conform with revenue recognition guidance, specifically related to the allocation and recognition of contract consideration earned from lease and non-lease revenue components. Topic 842 impacts the Company's accounting for leases primarily as a lessor. However, Topic 842 also impacts the Company's accounting as a lessee but is considered not material. As a lessor, the Company's leases with tenants generally provide for the lease of real estate properties, as well as common area maintenance, property taxes and other recoverable costs. To reflect recognition as one lease component, rental income and tenant reimbursements and other lease related property income that meet the requirements of the practical expedient provided by ASU No. 2018-11 have been combined under rental income in the Company's unaudited condensed consolidated statements of operations. For the three months ended September 30, 2021 and 2020, tenant reimbursements included in rental income amounted to $1,640,835 and $1,622,218, respectively, and for the nine months ended September 30, 2021 and 2020, tenant reimbursements included in rental income amounted to $5,036,196 and $5,521,723, respectively. The Company recognizes rental income from tenants under operating leases on a straight-line basis over the noncancelable term of the lease when collectability of such amounts is reasonably assured. Recognition of rental income on a straight-line basis includes the effects of rental abatements, lease incentives and fixed and determinable increases in lease payments over the lease term. If the lease provides for tenant improvements, management of the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or by the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that the tenant can take in the form of cash or a credit against its rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: • whether the lease stipulates how a tenant improvement allowance may be spent; • whether the amount of a tenant improvement allowance is in excess of market rates; • whether the tenant or landlord retains legal title to the improvements at the end of the lease term; • whether the tenant improvements are unique to the tenant or general-purpose in nature; and • whether the tenant improvements are expected to have any residual value at the end of the lease. Tenant reimbursements of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period the expenses are incurred and presented gross if the Company is the primary obligor and, with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk. In instances where the operating lease agreement has an early termination option, the termination penalty is based on a predetermined termination fee or based on the unamortized tenant improvements and leasing commissions. The Company evaluates the collectability of rents and other receivables on a regular basis based on factors including, among others, payment history, credit rating, the asset type, and current economic conditions. If the Company’s evaluation of these factors indicates it may not recover the full value of the receivable, it provides an allowance against the portion of the receivable that it estimates may not be recovered. This analysis requires the Company to determine whether there are factors indicating a receivable may not be fully collectible and to estimate the amount of the receivable that may not be collected. |
Gain or Loss on Sale of Real Estate Property | Gain or Loss on Sale of Real Estate Property The Company recognizes gain or loss on sale of real estate property when the Company has executed a contract for sale of the property, transferred controlling financial interest in the property to the buyer and determined that it is probable that the Company will collect substantially all of the consideration for the property. The Company's real estate property sale transactions during the three and nine months ended September 30, 2021 and 2020 met these criteria at closing. When properties are sold, operating results of the properties remain in continuing operations, and any associated gain or loss from the disposition is included in gain or loss on sale of real estate investments in the Company’s accompanying unaudited condensed consolidated statements of operations. |
Bad Debts and Allowances for Tenant and Deferred Rent Receivables and Leasing Costs | Bad Debts and Allowances for Tenant and Deferred Rent Receivables The Company's determination of the adequacy of its allowances for tenant receivables includes a binary assessment of whether or not the amounts due under a tenant’s lease agreement are probable of collection. For such amounts that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term. For such amounts that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount which would be recognized on a straight-line basis or (ii) cash that has been received from the tenant, with any tenant and deferred rent receivable balances charged as a direct write-off against rental income in the period of the change in the collectability determination. In addition, for tenant and deferred rent receivables deemed probable of collection, the Company also may record an allowance under other authoritative GAAP depending upon the Company's evaluation of the individual receivables, specific credit enhancements, current economic conditions, and other relevant factors. Such allowances are recorded as increases or decreases through rental income in the Company's unaudited condensed consolidated statements of operations. With respect to tenants in bankruptcy, management makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectability of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. When a tenant is in bankruptcy, the Company will record a bad debt allowance for the tenant’s receivable balance and generally will not recognize subsequent rental income until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments. Leasing Costs Initial direct costs such as legal fees and commissions are capitalized and amortized over the term of the lease. Internal leasing costs are charged to expense as incurred. These expenses are included in property expenses in the Company's unaudited condensed consolidated statements of operations. |
Impairment of Investment in Real Estate Properties | Impairment of Investment in Real Estate Properties The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of real estate assets may not be recoverable. When indicators of potential impairment are present that indicate that the carrying amounts of real estate assets may not be recoverable, management assesses whether the carrying value of the assets will be recovered through the future undiscounted operating cash flows expected from the use of and eventual disposition of the property. If, based on the analysis, the Company does not believe that it will be able to recover the carrying value of the asset, the Company records an impairment charge to the extent the carrying value exceeds the estimated fair value of the asset. As more fully discussed in Note 3 , the Company recorded impairment charges of $9,506,525 related to four of its real estate properties during the nine months ended September 30, 2020. The Company did not incur any impairment charges for its real estate properties during the three months September 30, 2021 and 2020 and the nine months ended September 30, 2021. However, the Company recognized a reversal of a prior year impairment charge of $400,999 in June 2021 related to a real estate property that is no longer classified as held for sale (see Note 3 for more details). |
Other Comprehensive Loss | Other Comprehensive Loss For all periods presented, other comprehensive loss is the same as net loss. |
Per Share Data | Per Share Data The Company reports a dual presentation of basic earnings per share (“Basic EPS”) and diluted earnings per share (“Diluted EPS”). Basic EPS excludes dilution and is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted EPS uses the treasury stock method or the if-converted method, where applicable, to compute for the potential dilution that would occur if dilutive securities or commitments to issue common stock were exercised. Diluted EPS is the same as Basic EPS for the three and nine months ended September 30, 2020 as the Company had a net loss attributable to common stockholders for both reported periods. As of September 30, 2021, there were 657,949.5 Class M OP Units, 56,029 Class P OP Units and 353,003 Class R OP Units, net of forfeiture of 6,997 units (adjusted for the 1:3 reverse stock split) that are convertible into Class C OP Units (see Note 12 for more details). The holders of Class C OP Units may exchange such Class C OP Units for shares of the Company's Class C common stock on a 1-for-1 basis or, at the Company’s sole and absolute discretion, for cash. The Class M OP Units, Class P OP Units and Class R OP Units, and the shares of Class C common stock into which they may ultimately be converted, were excluded from the computation of Diluted EPS for the three and nine months ended September 30, 2020 because their effect would not be dilutive. The weighted average dilutive effect of such units for the three and nine months ended September 30, 2021 was an increase of 1,219,316 and 1,188,099 shares, respectively, included in the computation of Diluted EPS. There were no other outstanding securities or commitments to issue common stock that would have a dilutive effect for the periods then ended. The Company has presented the basic and diluted net loss per share amounts on the accompanying unaudited condensed consolidated statements of operations for Class C and Class S share classes as a combined common share class. Application of the two-class method for allocating net loss attributable to common stockholders in accordance with the provisions of ASC 260, Earnings per Share , would have resulted in basic net income (loss) attributable to common stockholders of $0.47 and $(0.12) per share of Class C common stock for the three months ended September 30, 2021 and 2020, respectively, net income (loss) attributable to common stockholders of $0.47 and $(0.12) per share of Class S common stock for the three months ended September 30, 2021 and 2020, respectively, net income (loss) attributable to common stockholders of $0.21 and $(6.51) per share of Class C common stock for the nine months ended September 30, 2021 and 2020, respectively, and net income (loss) attributable to common stockholders of $0.20 and $(6.51) per share of Class S common stock for the nine months ended September 30, 2021 and 2020, respectively. The two-class method would have resulted in diluted net income (loss) attributable to common stockholders of $0.40 and $(0.12) per share of Class C common stock for the three months ended September 30, 2021 and 2020, respectively, diluted net income (loss) attributable to common stockholders of $0.47 and $(0.12) per share of Class S common stock for the three months ended September 30, 2021 and 2020, respectively, diluted net income (loss) attributable to common stockholders of $0.18 and $(6.51) per share of Class C common stock for the nine months ended September 30, 2021 and 2020, respectively, and diluted net income (loss) attributable to common stockholders of $0.20 and $(6.51) per share of Class S common stock for the nine months ended September 30, 2021 and 2020, respectively. Any difference in net loss per share if allocated under this method primarily reflects the lower effective distributions per share for Class S stockholders as a result of the payment of the deferred commission to the Class S distributor of these shares, and also reflects the impact of the timing of the declaration of the distributions relative to the time the shares were outstanding. |
Fair Value Disclosures | Fair Value Disclosures Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an existing price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy, which is based on three levels of inputs, the first two of which are considered observable and the last unobservable, that may be used to measure fair value, is as follows: Level 1: quoted prices in active markets for identical assets or liabilities; Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The fair value for certain financial instruments is derived using valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of financial instrument for which it is practicable to estimate the fair value: Cash and cash equivalents, restricted cash, receivable from sale of real estate property, tenant receivables, prepaid expenses and other assets and accounts payable, accrued and other liabilities: These balances approximate their fair values due to their short maturities. Derivative Instruments: The Company’s derivative instruments are presented at fair value in the accompanying unaudited condensed consolidated balance sheets. The valuation of these instruments is determined using a proprietary model that utilizes observable inputs. As such, the Company classifies these inputs as Level 2 inputs. The proprietary model uses the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and volatility. The fair values of interest rate swaps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit risks to the contracts, are incorporated in the fair values to account for potential nonperformance risk. Goodwill and Intangible Assets: The fair value measurements of goodwill and intangible assets are considered Level 3 nonrecurring fair value measurements. For goodwill, fair value measurement involves the determination of fair value of a reporting unit. The Company has used a Monte Carlo simulation model to estimate future performance, generating the fair value of the reporting unit's business. For intangible assets, fair value measurements include assumptions with inherent uncertainty, including projected offerings volumes and related projected revenues and long-term growth rates, among others. The carrying value of the Company's intangible assets is at risk of impairment if the Company experiences an adverse change in its business climate or has a current expectation that, more likely than not, an asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. Credit facilities and economic relief note payable: The fair values of the Company’s credit facilities and economic relief note payable approximate the carrying values of the credit facility and economic relief note payable as their interest rates and other terms are comparable to those available in the market place for a similar credit facility and short-term note, respectively. Mortgage notes payable: The fair value of the Company’s mortgage notes payable is estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities or similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs. |
Restricted Cash | Restricted Cash Restricted cash is comprised of funds which are restricted for use as required by certain lenders in conjunction with an acquisition or debt financing or modification and for on-site and tenant improvements or property taxes. Restricted cash as of September 30, 2021 and December 31, 2020 amounted to $2,410,951 and $129,118, respectively, for the properties discussed below and other lender reserves. Under the terms of the Company’s June 2021 refinancing of mortgages on its properties leased to Northrop Grumman and L3Harris Technologies, Inc. (“L3Harris”) with Banc of California as described in Note 7 , the Company established restricted cash accounts at Banc of California with $1,271,462 and $1,000,000 held for the Northrop Grumman and L3Harris properties, respectively, to fund building improvements, tenant improvements and leasing commissions. During the three months ended September 30, 2021, the amount of $128,538 was released to fund a leasing commission. Pursuant to amended lease agreements, the Company had an obligation to pay for tenant improvements as of September 30, 2021 and December 31, 2020 of $189,136 and $60,598, respectively, for tenant improvements to be incurred by tenants for which funds restricted by the lender were available. As of September 30, 2021 and December 31, 2020, the Company's restricted cash held to fund other improvements and leasing commissions totaled $2,271,462 and $32,086, respectively. |
Real Estate Investments Held for Sale | Real Estate Investments Held for Sale The Company generally considers a real estate investment to be “held for sale” when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as “real estate investment held for sale, net” and “assets related to real estate investment held for sale,” respectively, in the accompanying unaudited condensed consolidated balance sheets. Mortgage notes payable and other liabilities related to real estate investments held for sale are classified as “mortgage notes payable related to real estate investments held for sale, net” and “liabilities related to real estate investments held for sale,” respectively, in the accompanying unaudited condensed consolidated balance sheets. Real estate investments classified as held for sale are no longer depreciated and are reported at the lower of their carrying value or their estimated fair value less estimated costs to sell. Operating results of properties that were classified as held for sale in the ordinary course of business are included in continuing operations in the Company’s accompanying unaudited condensed consolidated statements of operations. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The Company records goodwill when the purchase price of a business combination exceeds the estimated fair value of net identified tangible and intangible assets acquired. The Company evaluates goodwill and other intangible assets for possible impairment in accordance with ASC 350, Intangibles–Goodwill and Other, on an annual basis, or more frequently when events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit has declined below its carrying value. If the carrying amount of the reporting unit exceeds its fair value, an impairment charge is recognized. In assessing goodwill impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that the fair value of a reporting unit is less than its carrying amount. The Company’s qualitative assessment of the recoverability of goodwill considers various macro-economic, industry-specific and company-specific factors. These factors include: (i) severe adverse industry or economic trends; (ii) significant company-specific actions, including exiting an activity in conjunction with restructuring of operations; (iii) current, historical or projected deterioration of the Company’s financial performance; or (iv) a sustained decrease in the Company’s market capitalization below its net book value. If, after assessing the totality of events or circumstances, the Company determines it is unlikely that the fair value of such reporting unit is less than its carrying amount, then a quantitative analysis is unnecessary. However, if the Company concludes otherwise, or if it elects to bypass the qualitative analysis, then it is required to perform a quantitative analysis that compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered impaired; otherwise, a goodwill impairment loss is recognized for the lesser of: (a) the amount that the carrying amount of a reporting unit exceeds its fair value; or (b) the amount of the goodwill allocated to that reporting unit. Intangible assets consist of purchased investor-related intangible assets, marketing-related intangible assets, developed or acquired technology and other intangible assets. Intangible assets are amortized over their estimated useful lives using the straight-line method ranging from three years to five years. No significant residual value is estimated for intangible assets. An asset is considered impaired if its carrying amount exceeds the future net cash flow the asset is expected to generate or if the Company has a current expectation that, more likely than not, an asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company evaluates long-lived assets (including intangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. |
Restricted Stock Units and Restricted Stock Unit Awards | Restricted Stock and Restricted Stock Unit Awards The fair values of the Operating Partnership's units or restricted stock unit awards issued or granted by the Company are based on an estimated value per share of the Company’s common stock on the date of issuance or grant, adjusted for an illiquidity discount due to the illiquid nature of the underlying equity. Operating Partnership units issued as purchase consideration in connection with the Self-Management Transaction discussed in Note 12 are recorded in equity under noncontrolling interests in the Operating Partnership in the Company's unaudited condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020 and unaudited condensed consolidated statements of equity for the three and nine months ended September 30, 2021 and 2020. For units granted to employees of the Company that are not included in the purchase consideration, the fair value of the award is amortized using the straight-line method over the requisite service period of the award, which is generally the vesting period. We have elected to record forfeitures as they occur. The Company determines the accounting classification of equity instruments (e.g. restricted stock units) that are issued as purchase consideration or part of the purchase consideration in a business combination, as either liability or equity, by first assessing whether the equity instruments meet liability classification in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (“ASC 480-10”), and then in accordance with ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock (“ASC 815-40”). Under ASC 480-10, equity instruments are classified as liabilities if the equity instruments are mandatorily redeemable, obligate the issuer to settle the equity instruments or the underlying shares by paying cash or other assets, or must or may require an unconditional obligation that must be settled by issuing a variable number of shares. If equity instruments do not meet liability classification under ASC 480-10, the Company assesses the requirements under ASC 815-40, which states that contracts that require or may require the issuer to settle the contract for cash are liabilities recorded at fair value, irrespective of the likelihood of the transaction occurring that triggers the net cash settlement feature. If the equity instruments do not require liability classification under ASC 815-40, in order to conclude equity classification, the Company assesses whether the equity instruments are indexed to its common stock and whether the equity instruments are classified as equity under ASC 815-40 or other applicable GAAP guidance. After all relevant assessments are made, the Company concludes whether the equity instruments are classified as liability or equity. Liability classified equity instruments are required to be accounted for at fair value both on the date of issuance and on subsequent accounting period ending dates, with all changes in fair value after the issuance date recorded in the statements of operations as a gain or loss. Equity classified equity instruments are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date. |
Reclassifications | Reclassifications Certain prior year balance sheet accounts have been reclassified to conform with the current year presentation. The reclassification did not affect net income in the prior year unaudited condensed consolidated statement of operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements New Accounting Standards Recently Issued and Not Yet Adopted In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 eases the potential burden in accounting for recognizing the effects of reference rate reform on financial reporting. Such challenges include the accounting and operational implications for contract modifications and hedge accounting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to loan and lease agreements, contracts, hedging relationships, and other transactions affected by reference rate reform. These provisions apply to contract modifications that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discounted because of reference rate reform. Qualifying modifications of loan agreements should be accounted for by prospectively adjusting the effective interest rate, and the modification would be considered “minor” so that any existing unamortized deferred loan origination fees and costs would carry forward and continue to be amortized. Qualifying modifications of lease agreements should be accounted for as a continuation of the existing agreement with no reassessments of the lease classification and the discount rate or remeasurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts. ASU 2020-04 also provides numerous optional expedients for hedge accounting. ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022, with adoption permitted as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected, the amendments must be applied prospectively for all eligible contract modifications. The Company is currently evaluating the effect that ASU 2020-04 will have on the Company’s consolidated financial statements. |
BUSINESS AND ORGANIZATION (Tabl
BUSINESS AND ORGANIZATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Net Asset Value Per Share | Since December 31, 2020, the Company’s board of directors has approved and established an updated quarterly estimated NAV per share of the Company’s Class C common stock and Class S common stock as follows: Valuation Date Effective Date NAV Per Share December 31, 2020 January 27, 2021 $23.03 (unaudited and adjusted for the 1:3 reverse stock split on February 1, 2021) March 31, 2021 May 5, 2021 $24.61 (unaudited) June 30, 2021 August 4, 2021 $26.05 (unaudited) September 30, 2021 November 5, 2021 $27.29 (unaudited) |
REAL ESTATE INVESTMENTS, NET (T
REAL ESTATE INVESTMENTS, NET (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties | The following table provides summary information regarding the Company’s operating properties as of September 30, 2021: Property Location Acquisition Date Property Type Land, Buildings and Improvements Tenant Origination and Absorption Costs Accumulated Depreciation and Amortization Total Investment in Real Estate Property, Net Accredo Health Orlando, FL 6/15/2016 Office $ 9,855,847 $ 1,269,350 $ (2,506,329) $ 8,618,868 Dollar General Litchfield, ME 11/4/2016 Retail 1,281,812 116,302 (196,188) 1,201,926 Dollar General Wilton, ME 11/4/2016 Retail 1,543,776 140,653 (251,079) 1,433,350 Dollar General Thompsontown, PA 11/4/2016 Retail 1,199,860 106,730 (188,502) 1,118,088 Dollar General Mt. Gilead, OH 11/4/2016 Retail 1,174,188 111,847 (180,730) 1,105,305 Dollar General Lakeside, OH 11/4/2016 Retail 1,112,872 100,857 (185,485) 1,028,244 Dollar General Castalia, OH 11/4/2016 Retail 1,102,086 86,408 (180,218) 1,008,276 Northrop Grumman Melbourne, FL 3/7/2017 Office 12,382,991 1,469,737 (3,466,555) 10,386,173 exp US Services Maitland, FL 3/27/2017 Office 6,056,668 388,248 (1,001,253) 5,443,663 Harley (1) Bedford, TX 4/13/2017 Retail 12,947,054 — (1,281,445) 11,665,609 Wyndham Summerlin, NV 6/22/2017 Office 10,406,483 669,232 (1,436,091) 9,639,624 Williams Sonoma Summerlin, NV 6/22/2017 Office 8,079,612 550,486 (1,292,121) 7,337,977 Omnicare Richmond, VA 7/20/2017 Industrial 7,275,115 281,442 (1,016,164) 6,540,393 EMCOR Cincinnati, OH 8/29/2017 Office 5,960,610 463,488 (738,712) 5,685,386 Husqvarna Charlotte, NC 11/30/2017 Industrial 11,840,200 1,013,948 (1,381,471) 11,472,677 AvAir Chandler, AZ 12/28/2017 Industrial 27,357,899 — (2,631,689) 24,726,210 3M DeKalb, IL 3/29/2018 Industrial 14,762,819 2,356,361 (4,410,594) 12,708,586 Cummins Nashville, TN 4/4/2018 Office 14,538,528 1,536,998 (2,759,017) 13,316,509 Northrop Grumman Parcel Melbourne, FL 6/21/2018 Land 329,410 — — 329,410 Texas Health Dallas, TX 9/13/2018 Office 6,976,703 713,221 (904,326) 6,785,598 Bon Secours Richmond, VA 10/31/2018 Office 10,399,820 800,356 (1,318,163) 9,882,013 Costco Issaquah, WA 12/20/2018 Office 27,330,797 2,765,136 (3,631,336) 26,464,597 Taylor Fresh Foods Yuma, AZ 10/24/2019 Industrial 34,194,369 2,894,017 (2,588,277) 34,500,109 Raising Cane's San Antonio, TX 7/26/2021 Retail 3,430,224 213,997 (24,221) 3,620,000 Levins Sacramento, CA 12/31/2019 Industrial 4,429,390 221,927 (386,065) 4,265,252 Dollar General Bakersfield, CA 12/31/2019 Retail 4,899,714 261,630 (257,482) 4,903,862 Labcorp San Carlos, CA 12/31/2019 Industrial 9,672,174 408,225 (357,562) 9,722,837 GSA (MSHA) Vacaville, CA 12/31/2019 Office 3,112,076 243,307 (242,401) 3,112,982 PreK Education San Antonio, TX 12/31/2019 Retail 12,447,287 555,767 (1,006,332) 11,996,722 Dollar Tree Morrow, GA 12/31/2019 Retail 1,320,367 73,298 (124,094) 1,269,571 Solar Turbines San Diego, CA 12/31/2019 Office 7,133,241 284,026 (561,523) 6,855,744 Wood Group San Diego, CA 12/31/2019 Industrial 9,869,520 539,633 (806,309) 9,602,844 ITW Rippey El Dorado, CA 12/31/2019 Industrial 7,071,143 304,387 (532,405) 6,843,125 Dollar General Big Spring, TX 12/31/2019 Retail 1,281,683 76,351 (89,195) 1,268,839 Gap Rocklin, CA 12/31/2019 Office 8,407,236 360,377 (839,188) 7,928,425 L3Harris San Diego, CA 12/31/2019 Industrial 11,631,857 454,035 (823,940) 11,261,952 Sutter Health Rancho Cordova, CA 12/31/2019 Office 29,586,023 1,616,610 (1,890,868) 29,311,765 Walgreens Santa Maria, CA 12/31/2019 Retail 5,223,442 335,945 (232,681) 5,326,706 $ 347,624,896 $ 23,784,332 $ (41,720,011) $ 329,689,217 (1) Reclassified to real estate investment held for investment and use during the second quarter of 2021 from real estate held for sale beginning September 30, 2020 (see detailed discussion below). Property Location Nine Months Ended Rite Aid Lake Elsinore, CA $ 349,457 Dana Cedar Park, TX 2,184,395 24 Hour Fitness Las Vegas, NV 5,664,517 Dinan Cars Morgan Hill, CA 1,308,156 Total $ 9,506,525 |
Acquisition of Raising Cane's | During the nine months ended September 30, 2021, the Company acquired the following real estate property: Property Acquisition Date Land Buildings and Tenant Total Raising Cane's 7/26/2021 $ 1,902,069 $ 1,528,155 $ 213,997 $ 3,644,221 During the three and nine months ended September 30, 2021, the Company recognized $47,004 of total revenue related to the above-acquired property. The noncancellable lease term of the property acquired during the nine months ended September 30, 2021 is as follows: Property Lease Expiration Raising Cane's 2/20/2028 |
Dispositions and Real Estate Investments Held for Sale | The dispositions during the nine months ended September 30, 2021 and 2020 were as follows: Nine Months Ended September 30, 2021 Property Location Disposition Date Property Type Rentable Square Feet Contract Sale Price Gain on Sale Chevron Gas Station Roseville, CA 1/7/2021 Retail 3,300 $ 4,050,000 $ 228,769 EcoThrift Sacramento, CA 1/29/2021 Retail 38,536 5,375,300 51,415 Chevron Gas Station San Jose, CA 2/12/2021 Retail 1,060 4,288,888 9,458 Dana Cedar Park, TX 7/7/2021 Industrial 45,465 10,000,000 4,127,638 88,361 $ 23,714,188 4,417,280 24 Hour Fitness Adjustment 115,133 Total $ 4,532,413 On January 7, 2021, the Company completed the sale of its Roseville, California retail property, which was leased to the operator of a Chevron gas station, for $4,050,000, which generated net proceeds of $3,914,909 after payment of commissions and closing costs. On January 29, 2021, the Company completed the sale of its Sacramento, California retail property, which was leased to EcoThrift, for $5,375,300, which generated net proceeds of $2,684,225 after repayment of the existing mortgage, commissions and closing costs. On February 12, 2021, the Company completed the sale of its San Jose, California retail property, which was leased to the operator of a Chevron gas station, for $4,288,888, which generated net proceeds of $4,054,327 after payment of commissions and closing costs. On July 7, 2021, the Company completed the sale of its Cedar Park, Texas industrial property which was leased to Dana Incorporated, but unoccupied, for $10,000,000, which generated net proceeds of $4,975,334 after repayment of the existing mortgage, commissions and closing costs. Upon the sale of the property, Dana Incorporated executed a promissory note payable to the Company for its obligation to continue to pay rent of $65,000 per month through July 2022 and pay its early termination fee of $1,381,767 no later than July 31, 2022. The unpaid amount of the Company's note receivable of $1,966,767 is presented as receivable from early termination of lease in the Company's unaudited condensed consolidated balance sheet as of September 30, 2021. On September 24, 2021, the Company received a notice of refund amounting to $115,133 related to the sale of its Las Vegas, Nevada retail property on December 16, 2020, which was formerly leased to 24 Hour Fitness. The refund relates to a portion of a holdback from sales proceeds to cover expenses by the buyer to prepare the property for lease, including the payment of accrued interest, common area maintenance, taxes, insurance and other related expenses and building permits to begin construction of improvements on the property. The refund was recognized as an adjustment to the estimate of the amount which was expected to be received and was included in gain on sale of real estate investments in the accompanying unaudited condensed consolidated statements of operations. Nine Months Ended September 30, 2020 Property Location Disposition Date Property Type Rentable Square Feet Contract Sale Price (Loss) Gain on Sale Rite Aid Lake Elsinore, CA 8/3/2020 Retail 70,960 $ 7,250,000 $ (422) Walgreens Stockbridge, GA 8/27/2020 Retail 15,120 5,538,462 1,306,768 Island Pacific Elk Grove, CA 9/16/2020 Retail 27,296 3,155,000 387,296 Total 113,376 $ 15,943,462 $ 1,693,642 December 31, Assets related to real estate investments held for sale: Land, buildings and improvements $ 25,675,459 Tenant origination and absorption costs 554,788 Accumulated depreciation and amortization (1,644,508) Real estate investments held for sale, net 24,585,739 Other assets, net 1,079,361 Total assets related to real estate investments held for sale: $ 25,665,100 Liabilities related to real estate investments held for sale: Mortgage notes payable, net $ 9,088,438 Other liabilities, net 801,337 Total liabilities related to real estate investments held for sale: $ 9,889,775 The following table summarizes the major components of rental income, expenses and impairment related to the three real estate investments held for sale as of September 30, 2020 (the property previously leased to Dinan Cars located in Morgan Hill, California, the property leased to Harley Davidson located in Bedford, Texas and the property previously leased to 24 Hour Fitness located in Las Vegas, Nevada), which were included in continuing operations for the three and nine months ended September 30, 2020: Three Months Ended September 30, Nine Months Ended September 30, 2020 2020 Total revenues $ 366,673 $ 2,004,279 Expenses: Interest expense 169,871 554,009 Depreciation and amortization 145,695 554,036 Other expenses 143,173 414,115 Impairment — 10,097,710 Total expenses 458,739 11,619,870 Net loss $ (92,066) $ (9,615,591) |
Rental Payments for Operating Leases | As of September 30, 2021, the future minimum contractual rent payments due to the Company under the Company’s non-cancellable operating leases, including lease amendments executed though the date of this report are as follows: October through December 2021 $ 6,687,205 2022 26,946,631 2023 25,024,065 2024 24,593,849 2025 21,424,993 2026 14,552,340 Thereafter 60,307,335 $ 179,536,418 |
Intangible Assets | As of September 30, 2021, the Company’s lease intangible assets were as follows: Tenant Origination and Absorption Costs Above-Market Lease Intangibles Below-Market Lease Intangibles Cost $ 23,784,332 $ 1,128,549 $ (15,097,132) Accumulated amortization (12,041,766) (405,074) 3,631,118 Net amount $ 11,742,566 $ 723,475 $ (11,466,014) The following table sets forth the Company's intangible assets, net as of September 30, 2021 and December 31, 2020 and their related useful lives: Intangible Assets Useful Life September 30, December 31, Investor list, net 5.0 years $ 3,494,740 $ 3,494,740 Web services technology, domains and licenses 3.0 years 3,661,852 3,466,102 7,156,592 6,960,842 Accumulated amortization (3,230,583) (1,833,054) Net $ 3,926,009 $ 5,127,788 |
Intangible Assets Amortization | As of September 30, 2021, the amortization of intangible assets for the remaining three months ending December 31, 2021 and for each of the next five years and thereafter is expected to be as follows: Tenant Origination and Absorption Costs Above-Market Lease Intangibles Below-Market Lease Intangibles October through December 2021 $ 792,583 $ 32,455 $ (363,041) 2022 2,715,030 129,823 (1,217,029) 2023 1,838,120 127,174 (921,169) 2024 1,726,446 122,543 (917,750) 2025 1,344,132 115,996 (917,750) 2026 720,006 78,557 (912,347) Thereafter 2,606,249 116,927 (6,216,928) $ 11,742,566 $ 723,475 $ (11,466,014) Weighted-average remaining amortization period 7.1 years 6.6 years 11.8 years |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED ENTITY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Schedule of Equity Method Investments [Line Items] | |
Investments | The Company’s investment in unconsolidated entity as of September 30, 2021 and December 31, 2020 is as follows: September 30, December 31, The TIC Interest $ 9,977,144 $ 10,002,368 |
Entities Equity In Earnings | The Company’s income from investment in unconsolidated entity for the three and nine months ended September 30, 2021 and 2020 is as follows: Three Months Ended Nine Months Ended 2021 2020 2021 2020 The TIC Interest $ 75,403 $ 92,617 $ 222,705 $ 239,028 |
The TIC Interest | |
Schedule of Equity Method Investments [Line Items] | |
Summarized Financial Information | The following is summarized financial information for the Santa Clara property as of September 30, 2021 and December 31, 2020 and for the three and nine months ended September 30, 2021 and 2020: September 30, December 31, Assets: Real estate investments, net $ 29,510,151 $ 29,906,146 Cash and cash equivalents 670,458 380,774 Other assets 176,583 164,684 Total assets $ 30,357,192 $ 30,451,604 Liabilities: Mortgage note payable, net $ 13,287,876 $ 13,489,126 Below-market lease, net 2,697,183 2,806,973 Other liabilities 343,815 92,777 Total liabilities 16,328,874 16,388,876 Total equity 14,028,318 14,062,728 Total liabilities and equity $ 30,357,192 $ 30,451,604 Three Months Ended Nine Months Ended 2021 2020 2021 2020 Total revenues $ 683,160 $ 697,851 $ 2,034,072 $ 2,047,424 Expenses: Interest expense 138,616 141,935 414,258 424,544 Depreciation and amortization 250,754 250,015 750,784 749,913 Other expenses 190,086 178,522 562,738 544,225 Total expenses 579,456 570,472 1,727,780 1,718,682 Net income $ 103,704 $ 127,379 $ 306,292 $ 328,742 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Net Carrying Amount of Goodwill | The changes in carrying value of goodwill as of September 30, 2021 and December 31, 2020 are as follows: September 30, December 31, Beginning balance $ 17,320,857 $ 50,588,000 Impairment of goodwill for the nine and the 12 months period ended, respectively — (33,267,143) Ending balance $ 17,320,857 $ 17,320,857 |
Schedule of Finite-Lived Intangible Assets | As of September 30, 2021, the Company’s lease intangible assets were as follows: Tenant Origination and Absorption Costs Above-Market Lease Intangibles Below-Market Lease Intangibles Cost $ 23,784,332 $ 1,128,549 $ (15,097,132) Accumulated amortization (12,041,766) (405,074) 3,631,118 Net amount $ 11,742,566 $ 723,475 $ (11,466,014) The following table sets forth the Company's intangible assets, net as of September 30, 2021 and December 31, 2020 and their related useful lives: Intangible Assets Useful Life September 30, December 31, Investor list, net 5.0 years $ 3,494,740 $ 3,494,740 Web services technology, domains and licenses 3.0 years 3,661,852 3,466,102 7,156,592 6,960,842 Accumulated amortization (3,230,583) (1,833,054) Net $ 3,926,009 $ 5,127,788 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS DETAILS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Supplemental Balance Sheet Disclosure [Abstract] | |
Summary of Tenant Receivables | Tenant receivables consisted of the following: September 30, December 31, Straight-line rent $ 5,399,340 $ 4,344,388 Tenant rent 98,363 204,775 Tenant reimbursements 1,849,245 2,116,627 Total $ 7,346,948 $ 6,665,790 |
Accounts Payable, Accrued and Other Liabilities | Accounts payable, accrued and other liabilities were comprised of the following: September 30, December 31, Accounts payable $ 1,214,828 $ 1,136,954 Accrued expenses 3,575,331 3,068,714 Accrued distributions 786,120 706,106 Accrued interest payable 611,507 629,628 Unearned rent 1,591,992 2,033,065 Lease incentive obligation 2,133,695 5,157 Total $ 9,913,473 $ 7,579,624 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | As of September 30, 2021 and December 31, 2020, the Company’s mortgage notes payable consisted of the following: Collateral 2021 Principal 2020 Principal Contractual Interest Effective Loan Accredo property $ 8,538,000 $ 8,538,000 3.80% 3.80% 8/1/2025 Six Dollar General properties 3,693,074 3,747,520 4.69% 4.69% 4/1/2022 Dana property — 4,466,865 4.56% 4.56% 4/1/2023 Northrop Grumman property (8) 6,971,012 5,518,589 3.35% 3.35% 5/21/2031 exp US Services property 3,272,333 3,321,931 (4) 4.25% 11/17/2024 Harley Davidson property (2) 6,525,824 — 4.25% 4.25% 9/1/2024 Wyndham property (3) 5,522,100 5,607,000 One-month LIBOR + 2.05% 4.34% 6/5/2027 Williams Sonoma property (3) 4,368,000 4,438,200 One-month LIBOR + 2.05% 4.34% 6/5/2022 Omnicare property 4,130,640 4,193,171 4.36% 4.36% 5/1/2026 EMCOR property 2,771,646 2,811,539 4.35% 4.35% 12/1/2024 Husqvarna property 6,379,182 6,379,182 (5) 4.60% 2/20/2028 AvAir property 19,950,000 19,950,000 3.80% 3.80% 8/1/2025 3M property 8,058,500 8,166,000 One-month LIBOR + 2.25% 5.09% 3/29/2023 Cummins property 8,222,700 8,332,200 One-month LIBOR + 2.25% 5.16% 4/4/2023 Texas Health property 4,304,825 4,363,203 4.00% 4.00% 12/5/2024 Bon Secours property 5,124,127 5,180,552 5.41% 5.41% 9/15/2026 Costco property 18,850,000 18,850,000 4.85% 4.85% 1/1/2030 Taylor Fresh Foods 12,350,000 12,350,000 3.85% 3.85% 11/1/2029 Levins property (6) 2,671,067 2,032,332 3.75% 3.75% 2/16/2026 Dollar General Bakersfield property (6) 2,244,201 2,268,922 3.65% 3.65% 2/16/2028 Labcorp property (6) 5,342,133 4,020,418 3.75% 3.75% 2/16/2026 GSA (MSHA) property (6) 1,728,428 1,752,092 3.65% 3.65% 2/16/2026 PreK Education property (7) 4,957,705 5,037,846 4.25% 4.25% 12/1/2021 Solar Turbines, Amec Foster, ITW Rippey properties (7) 9,044,276 9,214,700 3.35% 3.35% 11/1/2026 Dollar General Big Spring property (7) 590,962 599,756 4.50% 4.50% 4/1/2022 Gap property (7) 3,512,484 3,569,990 4.15% 4.15% 8/1/2023 L3Harris property (8) 6,260,223 5,185,929 3.35% 3.35% 5/21/2031 Sutter Health property (7) 13,669,395 13,879,655 4.50% 4.50% 3/9/2024 Walgreens property (7) 3,094,060 3,172,846 4.25% 4.25% 7/16/2030 Total mortgage notes payable 182,146,897 176,948,438 Plus unamortized mortgage premium, net (9) 239,979 447,471 Less unamortized deferred financing costs (1,472,537) (1,469,991) Mortgage notes payable, net $ 180,914,339 $ 175,925,918 (1) Contractual interest rate represents the interest rate in effect under the mortgage note payable as of September 30, 2021. Effective interest rate is calculated as the actual interest rate in effect as of September 30, 2021, consisting of the contractual interest rate and the effect of the interest rate swap, if applicable (see Note 8 for further information regarding the Company’s derivative instruments) . (2) Reclassified to mortgage note payable at June 30, 2021 from mortgage note payable related to real estate investments held for sale as of December 31, 2020 due to a subsequent decision not to sell the real estate investment property securing the loan which was reclassified back to assets held and used from assets held for sale (see Note 3 for additional information). (3) The loans on each of the Williams Sonoma and Wyndham properties (collectively, the “Property”) located in Summerlin, Nevada were originated by Nevada State Bank (“Bank”). The loans are collateralized by a deed of trust and a security agreement with assignment of rents and fixture filing. In addition, the individual loans are subject to a cross collateralization and cross default agreement whereby any default under, or failure to comply with the terms of any one or both of the loans, is an event of default under the terms of both loans. The value of the Property must be in an amount sufficient to maintain a loan to value ratio of no more than 60%. If the loan to value ratio is ever more than 60%, the borrower shall, upon the Bank’s written demand, reduce the principal balance of the loans so that the loan to value ratio is no more than 60%. (4) The initial contractual interest rate is 4.25% and starting November 18, 2022, the interest rate becomes the U.S. Treasury Bill index rate plus 3.25%. (5) The initial contractual interest rate is 4.60% through February 20, 2023 and then the greater of 4.60% or five-year Treasury Constant Maturity (“TCM”) plus 2.45% through February 20, 2028. (6) The mortgage note as of September 30, 2021 was refinanced on March 5, 2021 with a new lender and terms. The mortgage note as of December 31, 2020 was acquired through the Merger on December 31, 2019. (7) The loan was acquired through the Merger on December 31, 2019. (8) The loans on the Northrop Grumman and L3Harris properties were refinanced during the second quarter of 2021. The initial contractual interest rate is 3.35% through June 1, 2026 and then the Prime Rate in effect as of June 1, 2026 plus 0.25% through May 21, 2031; provided that the second fixed interest rate will not be lower than 3.35% per annum. (9) Represents unamortized net mortgage premium acquired through the Merger. |
Mortgage Notes Payable | The following summarizes the face value, carrying amount and fair value of the Company’s mortgage notes payable (Level 3 measurement) as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Face Value Carrying Fair Value Face value Carrying Fair Value Mortgage notes payable $ 182,146,897 $ 180,914,339 $ 183,304,467 $ 176,948,438 $ 175,925,918 $ 177,573,106 Collateral December 31, Harley Davidson property $ 6,623,346 EcoThrift property 2,573,509 Total 9,196,855 Plus unamortized mortgage premium 1,550 Less deferred financing costs (109,967) Mortgage notes payable, net $ 9,088,438 |
Schedule of Line of Credit Facilities | The details of the Company's credit facilities as of September 30, 2021 and December 31, 2020 follow: September 30, December 31, Credit facility $ — $ 6,000,000 Less unamortized deferred financing costs — (21,724) Credit facility, net $ — $ 5,978,276 |
Maturities of Long-term Debt | The following summarizes the future principal repayments of the Company’s mortgage notes payable and credit facility as of September 30, 2021: Mortgage Notes Credit Facility Total October through December 2021 $ 5,578,530 $ — $ 5,578,530 2022 11,173,350 — 11,173,350 2023 22,204,003 — 22,204,003 2024 31,565,888 — 31,565,888 2025 28,970,170 — 28,970,170 2026 26,484,067 — 26,484,067 Thereafter 56,170,889 — 56,170,889 Total principal 182,146,897 — 182,146,897 Plus unamortized mortgage premium, net of unamortized discount 239,979 — 239,979 Less deferred financing costs (1,472,537) — (1,472,537) Net principal $ 180,914,339 $ — $ 180,914,339 |
Interest Expense | The following is a reconciliation of the components of interest expense for the three and nine months ended September 30, 2021 and 2020: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Mortgage notes payable: Interest expense $ 1,812,254 $ 2,154,363 $ 5,638,890 $ 6,454,546 Amortization of deferred financing costs and mortgage premium, net 141,235 435,179 355,661 693,810 Prepayment penalties — 190,574 23,900 237,574 (Gain) loss on interest rate swaps (1) (166,539) (231,207) (586,782) 1,164,490 Credit facilities: Interest expense 27,486 128,333 169,571 449,791 Amortization of deferred financing costs 16,605 42,288 60,468 117,624 Other 504 12,998 49,622 78,226 Total interest expense $ 1,831,545 $ 2,732,528 $ 5,711,330 $ 9,196,061 (1) Includes unrealized (gain) loss on interest rate swaps of $(166,338) and $(272,912) for the three months ended September 30, 2021 and 2020, respectively, and $(684,057) and $1,019,840 for the nine months ended September 30, 2021 and 2020, respectively (see Note 8 for more details). Accrued interest payable of $54,980 and $45,636 as of September 30, 2021 and December 31, 2020, respectively, represents the unsettled portion of the interest rate swaps for the period from origination of the interest rate swap through the respective balance sheet dates. |
INTEREST RATE SWAP DERIVATIVES
INTEREST RATE SWAP DERIVATIVES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of the Notional Amount and Other Information Related to Interest Rate Swaps | The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of September 30, 2021 and December 31, 2020, respectively: September 30, 2021 December 31, 2020 Derivative Number of Instruments Notional Reference Weighted Average Fixed Pay Rate Weighted Number Notional Reference Weighted Average Fixed Pay Rate Weighted Interest Rate Swap Derivatives (iv) 4 $ 26,171,300 One-month LIBOR + applicable spread/Fixed at 4.05%-5.16% 4.53 % 2.3 years 8 $ 36,617,164 One-month LIBOR + applicable spread/Fixed at 3.13%-5.16% 3.35 % 2.2 years (i) The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The minimum notional amounts (outstanding principal balance at the maturity date) as of September 30, 2021 and December 31, 2020 were $24,935,999 and $34,989,063, respectively. (ii) The reference rate was as of September 30, 2021. (iii) The reference rate was as of December 31, 2020. (iv) During the three months ended September 30, 2020, the Company terminated the swap agreements related to the Rite Aid and Island Pacific properties at aggregate costs of $52,200. No termination of swap agreements were made during the three months ended September 30, 2021. During the nine months ended September 30, 2021 and 2020, the Company terminated swap agreements related to the GSA and Eco-Thrift properties at aggregate costs of $23,900 and terminated the swap agreements related to the Dinan, Rite Aid and Island Pacific properties at aggregate costs of $99,200, respectively. |
Summary of the Fair Value of Derivative Instruments and Their Classification | The following table sets forth the fair value of the Company’s derivative instruments (Level 2 measurement), as well as their classification in the unaudited condensed consolidated balance sheets: September 30, 2021 December 31, 2020 Derivative Instrument Balance Sheet Location Number of Fair Value Number of Fair Value Interest Rate Swaps Asset - Interest rate swap derivatives, at fair value — $ — — $ — Interest Rate Swaps Liability - Interest rate swap derivatives, at fair value 4 $ (1,073,998) 8 $ (1,743,889) |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | The total fees incurred for board services and paid by the Company for the three and nine months ended September 30, 2021 and 2020, is as follows: Three Months Ended Nine Months Ended Board of Directors Compensation 2021 2020 2021 2020 Cash paid for services rendered $ 25,000 $ 18,750 $ 85,000 $ 50,000 Value of shares issued for services rendered 95,000 82,500 275,000 255,833 Total $ 120,000 $ 101,250 $ 360,000 $ 305,833 Number of shares issued for services rendered (*) 3,647 3,929 12,168 11,022 * Adjusted for the 1:3 reverse stock split for the three and nine months ended September 30, 2020. |
OPERATING PARTNERSHIP UNITS (Ta
OPERATING PARTNERSHIP UNITS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Class M OP Units Conversion | In the event that the Class M OP Units are converted into Class C OP Units prior to December 31, 2023, such Class M OP Units shall be exchanged at the rate indicated below: Date of Exchange Early Conversion Rate From December 31, 2020 to December 30, 2021 50% of the Class M conversion ratio From December 31, 2021 to December 30, 2022 60% of the Class M conversion ratio From December 31, 2022 to December 30, 2023 70% of the Class M conversion ratio The Class M OP Units are eligible for an increase in the conversion ratio (conversion ratio enhancement) if the Company achieves both of the targets for AUM and AFFO in a given year as set forth below and as adjusted for the 1:3 reverse stock split: Hurdles AUM AFFO Class M ($ in billions) Per Share ($) Conversion Ratio Initial Conversion Ratio 1:1.6667 Fiscal Year 2021 $ 0.860 $ 1.77 1:1.9167 Fiscal Year 2022 $ 1.175 $ 1.95 1:2.5000 Fiscal Year 2023 $ 1.551 $ 2.10 1:3.0000 |
BUSINESS AND ORGANIZATION - Nar
BUSINESS AND ORGANIZATION - Narrative (Details) $ / shares in Units, ft² in Millions | Sep. 14, 2021$ / sharesshares | Aug. 31, 2017shares | Sep. 30, 2021propertyft²$ / sharesshares | Sep. 30, 2021propertyft²$ / sharesshares | Aug. 04, 2021$ / shares | Jun. 29, 2021USD ($) | May 05, 2021$ / shares | Feb. 01, 2021$ / shares | Jan. 31, 2021$ / shares | Jan. 27, 2021USD ($)$ / shares | Jan. 22, 2021USD ($) | Dec. 31, 2020$ / sharesshares | Sep. 30, 2020lease | Dec. 31, 2019$ / shares | Dec. 23, 2019USD ($) | Dec. 31, 2016USD ($) | Jul. 15, 2015USD ($) |
Business And Organization [Line Items] | |||||||||||||||||
Issued common stock (in shares) | 450,000,000 | 450,000,000 | |||||||||||||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |||||||||||||||
Number of square feet of aggregate leasable space (in square foot) | ft² | 2.2 | 2.2 | |||||||||||||||
Number of real estate properties | property | 38 | 38 | |||||||||||||||
Net asset value (in usd per share) | $ / shares | $ 26.05 | $ 24.61 | $ 23.03 | $ 30.48 | |||||||||||||
Primary Offering | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Common stock subscriptions | $ | $ 30,000,000 | ||||||||||||||||
Registered Offering | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Common stock subscriptions | $ | $ 3,333,333 | ||||||||||||||||
Real Estate Investment | Tenant-in-common | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Ownership percentage | 72.70% | 72.70% | |||||||||||||||
Retail | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Number of square feet of aggregate leasable space (in square foot) | lease | 113,376 | ||||||||||||||||
Number of real estate properties | property | 13 | 13 | |||||||||||||||
Office | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Number of real estate properties | property | 14 | 14 | |||||||||||||||
Industrial | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Number of real estate properties | property | 11 | 11 | |||||||||||||||
Operating Partnership | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Ownership interest (as a percent) | 86.00% | ||||||||||||||||
Class S | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | ||||||||||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.003 | $ 0.001 | ||||||||||||
Issuance of common stock (in shares) | 33,333,333 | ||||||||||||||||
Class C | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 | 300,000,000 | ||||||||||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.003 | $ 0.001 | ||||||||||||
Common stock subscriptions | $ | $ 800,000,000 | ||||||||||||||||
Stock repurchase program, minimum share value | $ | $ 500 | ||||||||||||||||
Class C | Distribution Reinvestment Plan | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Common stock subscriptions | $ | $ 75,000,000 | 75,000,000 | |||||||||||||||
Class C | Follow-on Offering | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Common stock subscriptions | $ | $ 600,547,672 | $ 725,000,000 | |||||||||||||||
Class C | 2021 Distribution Reinvestment Plan Offering | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Common stock subscriptions | $ | $ 100,000,000 | ||||||||||||||||
Series A Preferred Stock | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 | |||||||||||||||
Preferred stock, par value (in usd per share) | $ / shares | $ 0.001 | ||||||||||||||||
Preferred stock, dividend rate, percentage | 7.375% | ||||||||||||||||
Sale of stock, price per share | $ / shares | $ 25 | ||||||||||||||||
Series A Preferred Stock | Primary Offering | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Shares sold in offering (in shares) | 1,800,000 | ||||||||||||||||
Series A Preferred Stock | Over-Allotment Option | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Shares sold in offering (in shares) | 200,000 | ||||||||||||||||
Class C and Class S | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Net asset value (in usd per share) | $ / shares | $ 27.29 | $ 27.29 | |||||||||||||||
Preferred Stock | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |||||||||||||||
Preferred stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | |||||||||||||||
Preferred Stock | Series A Preferred Stock | |||||||||||||||||
Business And Organization [Line Items] | |||||||||||||||||
Issuance of common stock (in shares) | 2,000,000 | 2,000,000 |
BUSINESS AND ORGANIZATION - Net
BUSINESS AND ORGANIZATION - Net Asset Value Per Share (Details) - $ / shares | Sep. 30, 2021 | Aug. 04, 2021 | May 05, 2021 | Jan. 27, 2021 | Dec. 31, 2019 |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||
NAV Per Share (in usd per share) | $ 26.05 | $ 24.61 | $ 23.03 | $ 30.48 | |
Class C and Class S | |||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||
NAV Per Share (in usd per share) | $ 27.29 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Feb. 01, 2021$ / shares | Jan. 25, 2021 | Dec. 31, 2020USD ($)$ / shares | Sep. 30, 2021USD ($)$ / sharesshares | Mar. 31, 2021 | Sep. 30, 2020USD ($)$ / shares | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($)property$ / shares | Jan. 31, 2021$ / shares | Dec. 31, 2019shares |
Accounting Policies [Line Items] | ||||||||||||
Rental income from tenant reimbursements | $ 1,640,835 | $ 1,622,218 | $ 5,036,196 | $ 5,521,723 | ||||||||
Impairment (reversal) of real estate | $ 0 | $ 0 | $ (349,457) | $ (9,157,068) | $ 0 | $ (9,506,525) | ||||||
Number of impaired real estate properties | property | 4 | |||||||||||
Conversion ratio | 0.3333 | |||||||||||
Weighted average diluted effect | shares | 1,219,316 | 1,188,099 | ||||||||||
Net income (loss) per share, basic (in usd per share) | $ / shares | $ 0.47 | $ (0.13) | $ 0.21 | $ (6.50) | ||||||||
Net income (loss) per share, basic (in usd per share) | $ / shares | $ 0.40 | (0.13) | $ 0.18 | (6.50) | ||||||||
Restricted cash | $ 129,118 | $ 2,410,951 | $ 2,410,951 | |||||||||
Tenant reimbursements | 60,598 | 189,136 | $ 189,136 | |||||||||
Restricted cash to fund property tax | 32,086 | |||||||||||
Restricted Cash, Leasing Commission | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Restricted cash released | 128,538 | |||||||||||
Minimum | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Intangible assets, estimated useful lives | 3 years | |||||||||||
Maximum | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Intangible assets, estimated useful lives | 5 years | |||||||||||
Harley Davidson | Retail | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Impairment (reversal) of real estate | $ (632,233) | |||||||||||
Impairment reversal of real estate properties | 400,999 | |||||||||||
Northrop Grumman property | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Restricted cash | 1,271,462 | $ 1,271,462 | ||||||||||
L3Harris | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Restricted cash | $ 1,000,000 | $ 1,000,000 | ||||||||||
Class M OP Units | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Other ownership interests, units issued (in shares) | shares | 657,949.5 | 657,949.5 | ||||||||||
Conversion ratio | 1.6667 | 1 | 1.6667 | |||||||||
Class P OP Units | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Other ownership interests, units issued (in shares) | shares | 56,029 | 56,029 | 56,029 | |||||||||
Class R OP Units | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Other ownership interests, units issued (in shares) | shares | 353,003 | 353,003 | ||||||||||
Units forfeited (in shares) | shares | 5,663 | 6,997 | ||||||||||
Conversion ratio | 1 | |||||||||||
Class M OP Unit OR Class P OP Unit | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Conversion to class C units | shares | 0 | 0 | ||||||||||
Class C | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.003 | |||||||
Conversion ratio | 1 | 1 | ||||||||||
Net income (loss) per share, basic (in usd per share) | $ / shares | 0.47 | (0.12) | $ 0.21 | (6.51) | ||||||||
Net income (loss) per share, basic (in usd per share) | $ / shares | 0.40 | (0.12) | (6.51) | |||||||||
Class S | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | 0.001 | 0.001 | $ 0.003 | |||||||
Net income (loss) per share, basic (in usd per share) | $ / shares | 0.47 | (0.12) | 0.20 | (6.51) | ||||||||
Net income (loss) per share, basic (in usd per share) | $ / shares | $ 0.47 | $ (0.12) | $ 0.20 | $ (6.51) |
REAL ESTATE INVESTMENTS, NET -
REAL ESTATE INVESTMENTS, NET - Narrative (Details) | Jul. 20, 2021USD ($) | Jul. 07, 2021USD ($) | Feb. 12, 2021USD ($) | Jan. 29, 2021USD ($) | Jan. 07, 2021USD ($) | Dec. 31, 2020USD ($)leaseproperty | Sep. 16, 2020USD ($) | Aug. 27, 2020USD ($) | Aug. 03, 2020USD ($) | Apr. 01, 2020USD ($) | Sep. 30, 2021USD ($) | Jun. 30, 2021lease | Mar. 31, 2021USD ($)property | Sep. 30, 2020USD ($)lease | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($)property | Apr. 30, 2020USD ($)lease | Dec. 31, 2020USD ($)leaseproperty | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($)lease | Sep. 30, 2021USD ($) | Sep. 30, 2021property | Sep. 30, 2021state | Sep. 30, 2021lease |
Real Estate [Line Items] | ||||||||||||||||||||||||
Number of real estate properties | property | 38 | |||||||||||||||||||||||
Number of states in which entity operates | state | 14 | |||||||||||||||||||||||
Number of impaired real estate properties, vacant | property | 2 | |||||||||||||||||||||||
Impairment of real estate investment properties | $ 0 | $ 0 | $ 349,457 | $ 9,157,068 | $ 0 | $ 9,506,525 | ||||||||||||||||||
Impairment charge percentage | 0.10% | 2.20% | 0.10% | |||||||||||||||||||||
Note receivable | $ 1,824,383 | $ 1,824,383 | $ 1,966,767 | |||||||||||||||||||||
Gain on sale of real estate investments | 4,242,771 | $ 1,693,642 | $ 4,532,413 | $ 1,693,642 | ||||||||||||||||||||
Weighted-average remaining amortization period | 9 years 3 months 18 days | |||||||||||||||||||||||
Number of real estate properties identified as held-for-sale | property | 9 | |||||||||||||||||||||||
Number of real estate properties sold | lease | 5 | |||||||||||||||||||||||
Number of real estate properties, held-for-sale | 2 | 3 | 2 | 3 | 0 | 0 | ||||||||||||||||||
Number of real estate properties held for investment | lease | 2 | 2 | ||||||||||||||||||||||
Real estate investment held for investment | $ 329,456,639 | $ 329,456,639 | 329,689,217 | |||||||||||||||||||||
24 Hour Fitness | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Gain on sale of real estate investments | $ 115,133 | |||||||||||||||||||||||
Raising Cane's | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Revenue related to acquisition | 47,004 | $ 47,004 | ||||||||||||||||||||||
Dana | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Monthly rent payments | $ 65,000 | |||||||||||||||||||||||
Early termination fee | 1,381,767 | |||||||||||||||||||||||
Mortgages | 24 Hour Fitness | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Monthly mortgage payment | $ 32,000 | |||||||||||||||||||||||
Decrease in monthly mortgage payment | $ 8,000 | |||||||||||||||||||||||
Retail | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Number of real estate properties | property | 13 | |||||||||||||||||||||||
Disposal group, including discontinued operation, consideration | $ 15,943,462 | $ 15,943,462 | ||||||||||||||||||||||
Gain on sale of real estate investments | 1,693,642 | |||||||||||||||||||||||
Number of real estate properties identified as held-for-sale | property | 8 | |||||||||||||||||||||||
Number of real estate properties sold | lease | 3 | 4 | ||||||||||||||||||||||
Number of real estate properties, held-for-sale | lease | 4 | 4 | ||||||||||||||||||||||
Retail | 24 Hour Fitness | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Impairment of real estate investment properties | 5,664,517 | |||||||||||||||||||||||
Retail | Raising Cane's | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Real estate investment held for investment | 3,620,000 | |||||||||||||||||||||||
Retail | Chevron Gas Station, Roseville property | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Disposal group, including discontinued operation, consideration | $ 4,050,000 | |||||||||||||||||||||||
Proceeds from sale of real estate investments | 3,914,909 | |||||||||||||||||||||||
Gain on sale of real estate investments | $ 228,769 | |||||||||||||||||||||||
Retail | EcoThrift | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Disposal group, including discontinued operation, consideration | $ 5,375,300 | |||||||||||||||||||||||
Proceeds from sale of real estate investments | 2,684,225 | |||||||||||||||||||||||
Gain on sale of real estate investments | $ 51,415 | |||||||||||||||||||||||
Retail | Chevron Gas Station, San Jose property | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Disposal group, including discontinued operation, consideration | $ 4,288,888 | |||||||||||||||||||||||
Proceeds from sale of real estate investments | 4,054,327 | |||||||||||||||||||||||
Gain on sale of real estate investments | $ 9,458 | |||||||||||||||||||||||
Retail | Rite Aid | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Disposal group, including discontinued operation, consideration | $ 7,250,000 | |||||||||||||||||||||||
Proceeds from sale of real estate investments | 3,299,016 | |||||||||||||||||||||||
Gain on sale of real estate investments | $ (422) | |||||||||||||||||||||||
Retail | Walgreens | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Disposal group, including discontinued operation, consideration | $ 5,538,462 | |||||||||||||||||||||||
Proceeds from sale of real estate investments | 5,296,356 | |||||||||||||||||||||||
Gain on sale of real estate investments | $ 1,306,768 | |||||||||||||||||||||||
Operating leases extension | 10 years | |||||||||||||||||||||||
Retail | Island Pacific | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Disposal group, including discontinued operation, consideration | $ 3,155,000 | |||||||||||||||||||||||
Proceeds from sale of real estate investments | 1,124,016 | |||||||||||||||||||||||
Gain on sale of real estate investments | $ 387,296 | |||||||||||||||||||||||
Retail | Walgreens Santa Maria and Stockbridge | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Aggregate payment of lease incentives | $ 990,000 | |||||||||||||||||||||||
Number of operating leases with lease incentives | lease | 2 | |||||||||||||||||||||||
Retail | Walgreens | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Operating leases extension | 10 years | |||||||||||||||||||||||
Real estate investment held for investment | 5,326,706 | |||||||||||||||||||||||
Retail | PreK Education | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Aggregate payment of lease incentives | $ 2,000,000 | |||||||||||||||||||||||
Operating leases extension | 8 years | 8 years | ||||||||||||||||||||||
Retail | Harley Davidson | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Impairment of real estate investment properties | $ 632,233 | |||||||||||||||||||||||
Real estate held for sale | $ 12,010,919 | $ 12,010,919 | 11,860,000 | |||||||||||||||||||||
Impairment reversal of real estate properties | $ 400,999 | |||||||||||||||||||||||
Retail | Harley Davidson | Scenario, Plan | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Proceeds from sale of real estate investments | $ 12,117,500 | |||||||||||||||||||||||
Real estate investment held for investment | $ 11,779,687 | |||||||||||||||||||||||
Office | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Number of real estate properties | property | 14 | |||||||||||||||||||||||
Industrial | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Number of real estate properties | property | 11 | |||||||||||||||||||||||
Number of real estate properties identified as held-for-sale | property | 1 | |||||||||||||||||||||||
Number of real estate properties sold | lease | 1 | |||||||||||||||||||||||
Industrial | Dana | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Impairment of real estate investment properties | 2,184,395 | |||||||||||||||||||||||
Disposal group, including discontinued operation, consideration | 10,000,000 | |||||||||||||||||||||||
Proceeds from sale of real estate investments | $ 4,975,334 | |||||||||||||||||||||||
Gain on sale of real estate investments | $ 4,127,638 | |||||||||||||||||||||||
Industrial | Rite Aid | ||||||||||||||||||||||||
Real Estate [Line Items] | ||||||||||||||||||||||||
Impairment of real estate investment properties | $ 349,457 |
REAL ESTATE INVESTMENTS, NET _2
REAL ESTATE INVESTMENTS, NET - Summary of Real Estate Properties (Details) - USD ($) | Sep. 30, 2021 | Jul. 26, 2021 | Dec. 31, 2020 |
Real Estate [Line Items] | |||
Land, Buildings and Improvements | $ 347,624,896 | ||
Tenant origination and absorption costs | 23,784,332 | $ 23,792,057 | |
Accumulated Depreciation and Amortization | (41,720,011) | (32,091,211) | |
Total investments in real estate property, net | 329,689,217 | $ 329,456,639 | |
Accredo Health | Office | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 9,855,847 | ||
Tenant origination and absorption costs | 1,269,350 | ||
Accumulated Depreciation and Amortization | (2,506,329) | ||
Total investments in real estate property, net | 8,618,868 | ||
Dollar General One | Retail | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 1,281,812 | ||
Tenant origination and absorption costs | 116,302 | ||
Accumulated Depreciation and Amortization | (196,188) | ||
Total investments in real estate property, net | 1,201,926 | ||
Dollar General Two | Retail | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 1,543,776 | ||
Tenant origination and absorption costs | 140,653 | ||
Accumulated Depreciation and Amortization | (251,079) | ||
Total investments in real estate property, net | 1,433,350 | ||
Dollar General Three | Retail | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 1,199,860 | ||
Tenant origination and absorption costs | 106,730 | ||
Accumulated Depreciation and Amortization | (188,502) | ||
Total investments in real estate property, net | 1,118,088 | ||
Dollar General Four | Retail | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 1,174,188 | ||
Tenant origination and absorption costs | 111,847 | ||
Accumulated Depreciation and Amortization | (180,730) | ||
Total investments in real estate property, net | 1,105,305 | ||
Dollar General Five | Retail | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 1,112,872 | ||
Tenant origination and absorption costs | 100,857 | ||
Accumulated Depreciation and Amortization | (185,485) | ||
Total investments in real estate property, net | 1,028,244 | ||
Dollar General Six | Retail | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 1,102,086 | ||
Tenant origination and absorption costs | 86,408 | ||
Accumulated Depreciation and Amortization | (180,218) | ||
Total investments in real estate property, net | 1,008,276 | ||
Northrop Grumman | Office | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 12,382,991 | ||
Tenant origination and absorption costs | 1,469,737 | ||
Accumulated Depreciation and Amortization | (3,466,555) | ||
Total investments in real estate property, net | 10,386,173 | ||
exp US Services | Office | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 6,056,668 | ||
Tenant origination and absorption costs | 388,248 | ||
Accumulated Depreciation and Amortization | (1,001,253) | ||
Total investments in real estate property, net | 5,443,663 | ||
Harley | Retail | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 12,947,054 | ||
Tenant origination and absorption costs | 0 | ||
Accumulated Depreciation and Amortization | (1,281,445) | ||
Total investments in real estate property, net | 11,665,609 | ||
Wyndham | Office | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 10,406,483 | ||
Tenant origination and absorption costs | 669,232 | ||
Accumulated Depreciation and Amortization | (1,436,091) | ||
Total investments in real estate property, net | 9,639,624 | ||
Williams Sonoma | Office | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 8,079,612 | ||
Tenant origination and absorption costs | 550,486 | ||
Accumulated Depreciation and Amortization | (1,292,121) | ||
Total investments in real estate property, net | 7,337,977 | ||
Omnicare | Industrial | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 7,275,115 | ||
Tenant origination and absorption costs | 281,442 | ||
Accumulated Depreciation and Amortization | (1,016,164) | ||
Total investments in real estate property, net | 6,540,393 | ||
EMCOR | Office | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 5,960,610 | ||
Tenant origination and absorption costs | 463,488 | ||
Accumulated Depreciation and Amortization | (738,712) | ||
Total investments in real estate property, net | 5,685,386 | ||
Husqvarna | Industrial | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 11,840,200 | ||
Tenant origination and absorption costs | 1,013,948 | ||
Accumulated Depreciation and Amortization | (1,381,471) | ||
Total investments in real estate property, net | 11,472,677 | ||
AvAir | Industrial | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 27,357,899 | ||
Tenant origination and absorption costs | 0 | ||
Accumulated Depreciation and Amortization | (2,631,689) | ||
Total investments in real estate property, net | 24,726,210 | ||
3M | Industrial | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 14,762,819 | ||
Tenant origination and absorption costs | 2,356,361 | ||
Accumulated Depreciation and Amortization | (4,410,594) | ||
Total investments in real estate property, net | 12,708,586 | ||
Cummins | Office | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 14,538,528 | ||
Tenant origination and absorption costs | 1,536,998 | ||
Accumulated Depreciation and Amortization | (2,759,017) | ||
Total investments in real estate property, net | 13,316,509 | ||
Northrop Grumman Parcel | Land | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 329,410 | ||
Tenant origination and absorption costs | 0 | ||
Accumulated Depreciation and Amortization | 0 | ||
Total investments in real estate property, net | 329,410 | ||
Texas Health | Office | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 6,976,703 | ||
Tenant origination and absorption costs | 713,221 | ||
Accumulated Depreciation and Amortization | (904,326) | ||
Total investments in real estate property, net | 6,785,598 | ||
Bon Secours | Office | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 10,399,820 | ||
Tenant origination and absorption costs | 800,356 | ||
Accumulated Depreciation and Amortization | (1,318,163) | ||
Total investments in real estate property, net | 9,882,013 | ||
Costco | Office | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 27,330,797 | ||
Tenant origination and absorption costs | 2,765,136 | ||
Accumulated Depreciation and Amortization | (3,631,336) | ||
Total investments in real estate property, net | 26,464,597 | ||
Taylor Fresh Foods | Industrial | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 34,194,369 | ||
Tenant origination and absorption costs | 2,894,017 | ||
Accumulated Depreciation and Amortization | (2,588,277) | ||
Total investments in real estate property, net | 34,500,109 | ||
Raising Cane's | |||
Real Estate [Line Items] | |||
Tenant origination and absorption costs | $ 213,997 | ||
Raising Cane's | Retail | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 3,430,224 | ||
Tenant origination and absorption costs | 213,997 | ||
Accumulated Depreciation and Amortization | (24,221) | ||
Total investments in real estate property, net | 3,620,000 | ||
Levins | Industrial | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 4,429,390 | ||
Tenant origination and absorption costs | 221,927 | ||
Accumulated Depreciation and Amortization | (386,065) | ||
Total investments in real estate property, net | 4,265,252 | ||
Dollar General | Retail | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 4,899,714 | ||
Tenant origination and absorption costs | 261,630 | ||
Accumulated Depreciation and Amortization | (257,482) | ||
Total investments in real estate property, net | 4,903,862 | ||
Labcorp | Industrial | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 9,672,174 | ||
Tenant origination and absorption costs | 408,225 | ||
Accumulated Depreciation and Amortization | (357,562) | ||
Total investments in real estate property, net | 9,722,837 | ||
GSA (MSHA) | Office | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 3,112,076 | ||
Tenant origination and absorption costs | 243,307 | ||
Accumulated Depreciation and Amortization | (242,401) | ||
Total investments in real estate property, net | 3,112,982 | ||
PreK Education | Retail | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 12,447,287 | ||
Tenant origination and absorption costs | 555,767 | ||
Accumulated Depreciation and Amortization | (1,006,332) | ||
Total investments in real estate property, net | 11,996,722 | ||
Dollar Tree | Retail | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 1,320,367 | ||
Tenant origination and absorption costs | 73,298 | ||
Accumulated Depreciation and Amortization | (124,094) | ||
Total investments in real estate property, net | 1,269,571 | ||
Solar Turbines | Office | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 7,133,241 | ||
Tenant origination and absorption costs | 284,026 | ||
Accumulated Depreciation and Amortization | (561,523) | ||
Total investments in real estate property, net | 6,855,744 | ||
Wood Group | Industrial | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 9,869,520 | ||
Tenant origination and absorption costs | 539,633 | ||
Accumulated Depreciation and Amortization | (806,309) | ||
Total investments in real estate property, net | 9,602,844 | ||
ITW Rippey | Industrial | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 7,071,143 | ||
Tenant origination and absorption costs | 304,387 | ||
Accumulated Depreciation and Amortization | (532,405) | ||
Total investments in real estate property, net | 6,843,125 | ||
Dollar General Seven | Retail | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 1,281,683 | ||
Tenant origination and absorption costs | 76,351 | ||
Accumulated Depreciation and Amortization | (89,195) | ||
Total investments in real estate property, net | 1,268,839 | ||
Gap | Office | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 8,407,236 | ||
Tenant origination and absorption costs | 360,377 | ||
Accumulated Depreciation and Amortization | (839,188) | ||
Total investments in real estate property, net | 7,928,425 | ||
L3Harris | Industrial | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 11,631,857 | ||
Tenant origination and absorption costs | 454,035 | ||
Accumulated Depreciation and Amortization | (823,940) | ||
Total investments in real estate property, net | 11,261,952 | ||
Sutter Health | Office | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 29,586,023 | ||
Tenant origination and absorption costs | 1,616,610 | ||
Accumulated Depreciation and Amortization | (1,890,868) | ||
Total investments in real estate property, net | 29,311,765 | ||
Walgreens | Retail | |||
Real Estate [Line Items] | |||
Land, Buildings and Improvements | 5,223,442 | ||
Tenant origination and absorption costs | 335,945 | ||
Accumulated Depreciation and Amortization | (232,681) | ||
Total investments in real estate property, net | $ 5,326,706 |
REAL ESTATE INVESTMENTS, NET _3
REAL ESTATE INVESTMENTS, NET - Real Estate Impairment Charges (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Real Estate [Line Items] | ||||||
Impairment of real estate investment properties | $ 0 | $ 0 | $ 349,457 | $ 9,157,068 | $ 0 | $ 9,506,525 |
Rite Aid | Industrial | ||||||
Real Estate [Line Items] | ||||||
Impairment of real estate investment properties | 349,457 | |||||
Dana | Industrial | ||||||
Real Estate [Line Items] | ||||||
Impairment of real estate investment properties | 2,184,395 | |||||
24 Hour Fitness | Retail | ||||||
Real Estate [Line Items] | ||||||
Impairment of real estate investment properties | 5,664,517 | |||||
Dinan Cars | Industrial | ||||||
Real Estate [Line Items] | ||||||
Impairment of real estate investment properties | $ 1,308,156 |
REAL ESTATE INVESTMENTS, NET _4
REAL ESTATE INVESTMENTS, NET - Acquisition (Details) - USD ($) | Sep. 30, 2021 | Jul. 26, 2021 | Dec. 31, 2020 |
Real Estate [Line Items] | |||
Land | $ 67,340,810 | $ 65,358,321 | |
Tenant origination and absorption costs | 23,784,332 | 23,792,057 | |
Total investments in real estate property | $ 371,409,228 | $ 361,547,850 | |
Raising Cane's | |||
Real Estate [Line Items] | |||
Land | $ 1,902,069 | ||
Buildings and Improvements | 1,528,155 | ||
Tenant origination and absorption costs | 213,997 | ||
Total investments in real estate property | $ 3,644,221 |
REAL ESTATE INVESTMENTS, NET _5
REAL ESTATE INVESTMENTS, NET - Dispositions (Details) | Jul. 20, 2021USD ($)lease | Feb. 12, 2021USD ($)ft² | Jan. 29, 2021USD ($)ft² | Jan. 07, 2021USD ($)ft² | Sep. 16, 2020USD ($)lease | Aug. 27, 2020USD ($)lease | Aug. 03, 2020USD ($)lease | Sep. 30, 2021USD ($)ft²lease | Sep. 30, 2020USD ($)lease | Sep. 30, 2021USD ($)ft²lease | Sep. 30, 2020USD ($)lease | Jul. 07, 2021USD ($) |
Real Estate [Line Items] | ||||||||||||
Rentable Square Feet | ft² | 2,200,000 | 2,200,000 | ||||||||||
(Loss) Gain on Sale | $ 4,242,771 | $ 1,693,642 | $ 4,532,413 | $ 1,693,642 | ||||||||
24 Hour Fitness Adjustment | ||||||||||||
Real Estate [Line Items] | ||||||||||||
(Loss) Gain on Sale | $ 115,133 | |||||||||||
Retail | ||||||||||||
Real Estate [Line Items] | ||||||||||||
Rentable Square Feet | lease | 113,376 | 113,376 | ||||||||||
Contract Sale Price | $ 15,943,462 | $ 15,943,462 | ||||||||||
(Loss) Gain on Sale | $ 1,693,642 | |||||||||||
Retail | Chevron Gas Station, Roseville property | ||||||||||||
Real Estate [Line Items] | ||||||||||||
Rentable Square Feet | ft² | 3,300 | |||||||||||
Contract Sale Price | $ 4,050,000 | |||||||||||
(Loss) Gain on Sale | $ 228,769 | |||||||||||
Retail | EcoThrift | ||||||||||||
Real Estate [Line Items] | ||||||||||||
Rentable Square Feet | ft² | 38,536 | |||||||||||
Contract Sale Price | $ 5,375,300 | |||||||||||
(Loss) Gain on Sale | $ 51,415 | |||||||||||
Retail | Chevron Gas Station, San Jose property | ||||||||||||
Real Estate [Line Items] | ||||||||||||
Rentable Square Feet | ft² | 1,060 | |||||||||||
Contract Sale Price | $ 4,288,888 | |||||||||||
(Loss) Gain on Sale | $ 9,458 | |||||||||||
Retail | Rite Aid | ||||||||||||
Real Estate [Line Items] | ||||||||||||
Rentable Square Feet | lease | 70,960 | |||||||||||
Contract Sale Price | $ 7,250,000 | |||||||||||
(Loss) Gain on Sale | $ (422) | |||||||||||
Retail | Walgreens | ||||||||||||
Real Estate [Line Items] | ||||||||||||
Rentable Square Feet | lease | 15,120 | |||||||||||
Contract Sale Price | $ 5,538,462 | |||||||||||
(Loss) Gain on Sale | $ 1,306,768 | |||||||||||
Retail | Island Pacific | ||||||||||||
Real Estate [Line Items] | ||||||||||||
Rentable Square Feet | lease | 27,296 | |||||||||||
Contract Sale Price | $ 3,155,000 | |||||||||||
(Loss) Gain on Sale | $ 387,296 | |||||||||||
Industrial | Dana | ||||||||||||
Real Estate [Line Items] | ||||||||||||
Rentable Square Feet | lease | 45,465 | |||||||||||
Contract Sale Price | $ 10,000,000 | |||||||||||
(Loss) Gain on Sale | $ 4,127,638 | |||||||||||
Retail And Industrial | ||||||||||||
Real Estate [Line Items] | ||||||||||||
Rentable Square Feet | lease | 88,361 | 88,361 | ||||||||||
Contract Sale Price | $ 23,714,188 | $ 23,714,188 | ||||||||||
(Loss) Gain on Sale | $ 4,417,280 |
REAL ESTATE INVESTMENTS, NET _6
REAL ESTATE INVESTMENTS, NET - Rental Payments for Operating Leases (Details) | Sep. 30, 2021USD ($) |
Real Estate [Abstract] | |
October through December 2021 | $ 6,687,205 |
2022 | 26,946,631 |
2023 | 25,024,065 |
2024 | 24,593,849 |
2025 | 21,424,993 |
2026 | 14,552,340 |
Thereafter | 60,307,335 |
Total | $ 179,536,418 |
REAL ESTATE INVESTMENTS, NET _7
REAL ESTATE INVESTMENTS, NET - Intangible Assets (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Real Estate [Line Items] | ||
Cost | $ 7,156,592 | $ 6,960,842 |
Accumulated amortization | (3,230,583) | (1,833,054) |
Net amount | 3,926,009 | $ 5,127,788 |
Tenant Origination and Absorption Costs | ||
Real Estate [Line Items] | ||
Cost | 23,784,332 | |
Accumulated amortization | (12,041,766) | |
Net amount | 11,742,566 | |
Above-Market Lease Intangibles | ||
Real Estate [Line Items] | ||
Cost | 1,128,549 | |
Accumulated amortization | (405,074) | |
Net amount | 723,475 | |
Below-Market Lease Intangibles | ||
Below-Market Lease Intangibles | ||
Cost | (15,097,132) | |
Accumulated amortization | 3,631,118 | |
Net amount | $ (11,466,014) |
REAL ESTATE INVESTMENTS, NET _8
REAL ESTATE INVESTMENTS, NET - Intangible Assets Amortization (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Real Estate [Line Items] | ||
October through December 2021 | $ 476,456 | |
2022 | 1,905,826 | |
2023 | 815,228 | |
2024 | 728,499 | |
Net amount | $ 3,926,009 | $ 5,127,788 |
Below-Market Lease Intangibles | ||
Weighted-average remaining amortization period | 9 years 3 months 18 days | |
Tenant Origination and Absorption Costs | ||
Real Estate [Line Items] | ||
October through December 2021 | $ 792,583 | |
2022 | 2,715,030 | |
2023 | 1,838,120 | |
2024 | 1,726,446 | |
2025 | 1,344,132 | |
2026 | 720,006 | |
Thereafter | 2,606,249 | |
Net amount | $ 11,742,566 | |
Below-Market Lease Intangibles | ||
Weighted-average remaining amortization period | 7 years 1 month 6 days | |
Above-Market Lease Intangibles | ||
Real Estate [Line Items] | ||
October through December 2021 | $ 32,455 | |
2022 | 129,823 | |
2023 | 127,174 | |
2024 | 122,543 | |
2025 | 115,996 | |
2026 | 78,557 | |
Thereafter | 116,927 | |
Net amount | $ 723,475 | |
Below-Market Lease Intangibles | ||
Weighted-average remaining amortization period | 6 years 7 months 6 days | |
Below-Market Lease Intangibles | ||
Below-Market Lease Intangibles | ||
October through December 2021 | $ (363,041) | |
2022 | (1,217,029) | |
2023 | (921,169) | |
2024 | (917,750) | |
2025 | (917,750) | |
2026 | (912,347) | |
Thereafter | (6,216,928) | |
Net amount | $ (11,466,014) | |
Weighted-average remaining amortization period | 11 years 9 months 18 days |
REAL ESTATE INVESTMENTS, NET _9
REAL ESTATE INVESTMENTS, NET - Real Estate Investments Held for Sale (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Assets related to real estate investments held for sale: | ||||
Real estate investments held for sale, net | $ 0 | $ 24,585,739 | ||
Other assets, net | 0 | 1,079,361 | ||
Liabilities related to real estate investments held for sale: | ||||
Mortgage notes payable, net | 0 | 9,088,438 | ||
Other liabilities, net | $ 0 | 801,337 | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||
Assets related to real estate investments held for sale: | ||||
Land, buildings and improvements | 25,675,459 | |||
Tenant origination and absorption costs | 554,788 | |||
Accumulated depreciation and amortization | (1,644,508) | |||
Real estate investments held for sale, net | 24,585,739 | |||
Other assets, net | 1,079,361 | |||
Total assets related to real estate investments held for sale: | 25,665,100 | |||
Liabilities related to real estate investments held for sale: | ||||
Mortgage notes payable, net | 9,088,438 | |||
Other liabilities, net | 801,337 | |||
Total liabilities related to real estate investments held for sale: | $ 9,889,775 | |||
Rental income, expenses and impairment related to real estate investments held for sale: | ||||
Total revenues | $ 366,673 | $ 2,004,279 | ||
Expenses: | ||||
Interest expense | 169,871 | 554,009 | ||
Depreciation and amortization | 145,695 | 554,036 | ||
Other expenses | 143,173 | 414,115 | ||
Impairment | 0 | 10,097,710 | ||
Total expenses | 458,739 | 11,619,870 | ||
Net loss | $ (92,066) | $ (9,615,591) |
INVESTMENT IN UNCONSOLIDATED _3
INVESTMENT IN UNCONSOLIDATED ENTITY - Investments (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
The TIC Interest | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in unconsolidated entity | $ 9,977,144 | $ 10,002,368 |
INVESTMENT IN UNCONSOLIDATED _4
INVESTMENT IN UNCONSOLIDATED ENTITY - Entities Equity In Earnings (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of Equity Method Investments [Line Items] | ||||
Income from investment in unconsolidated entity | $ 75,403 | $ 92,617 | $ 222,705 | $ 239,028 |
The TIC Interest | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Income from investment in unconsolidated entity | $ 75,403 | $ 92,617 | $ 222,705 | $ 239,028 |
INVESTMENT IN UNCONSOLIDATED _5
INVESTMENT IN UNCONSOLIDATED ENTITY - Narrative (Details) - Rich Uncles Real Estate Investment Trust - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 72.70% | ||||
Ownership percentage by noncontrolling owners | 27.30% | ||||
Dividends | $ 85,962 | $ 207,950 | $ 247,929 | $ 542,140 | |
Hagg Lane II, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage by noncontrolling owners | 23.40% | ||||
Hagg Lane III, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage by noncontrolling owners | 3.90% |
INVESTMENT IN UNCONSOLIDATED _6
INVESTMENT IN UNCONSOLIDATED ENTITY - Summarized Financial Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Assets | ||||||||
Total assets | $ 430,440,328 | $ 430,440,328 | $ 407,433,014 | |||||
Liabilities: | ||||||||
Total liabilities | 204,716,735 | 204,716,735 | 217,180,778 | |||||
Total equity | 224,973,593 | $ 185,511,657 | 224,973,593 | $ 185,511,657 | $ 168,041,287 | 182,886,668 | $ 189,662,529 | $ 240,172,562 |
Total liabilities and equity | 430,440,328 | 430,440,328 | 407,433,014 | |||||
The TIC Interest | ||||||||
Assets | ||||||||
Real estate investments, net | 29,510,151 | 29,510,151 | 29,906,146 | |||||
Cash and cash equivalents | 670,458 | 670,458 | 380,774 | |||||
Other assets | 176,583 | 176,583 | 164,684 | |||||
Total assets | 30,357,192 | 30,357,192 | 30,451,604 | |||||
Liabilities: | ||||||||
Mortgage note payable, net | 13,287,876 | 13,287,876 | 13,489,126 | |||||
Below-market lease, net | 2,697,183 | 2,697,183 | 2,806,973 | |||||
Other liabilities | 343,815 | 343,815 | 92,777 | |||||
Total liabilities | 16,328,874 | 16,328,874 | 16,388,876 | |||||
Total equity | 14,028,318 | 14,028,318 | 14,062,728 | |||||
Total liabilities and equity | 30,357,192 | 30,357,192 | $ 30,451,604 | |||||
Total revenues | 683,160 | 697,851 | 2,034,072 | 2,047,424 | ||||
Expenses: | ||||||||
Interest expense | 138,616 | 141,935 | 414,258 | 424,544 | ||||
Depreciation and amortization | 250,754 | 250,015 | 750,784 | 749,913 | ||||
Other expenses | 190,086 | 178,522 | 562,738 | 544,225 | ||||
Total expenses | 579,456 | 570,472 | 1,727,780 | 1,718,682 | ||||
Net income | $ 103,704 | $ 127,379 | $ 306,292 | $ 328,742 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET - Net Carrying Amount of Goodwill (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | |||
Beginning balance | $ 17,320,857 | $ 50,588,000 | $ 50,588,000 |
Impairment of goodwill for the nine and the 12 months period ended, respectively | 0 | $ (33,267,143) | (33,267,143) |
Ending balance | $ 17,320,857 | $ 17,320,857 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Apr. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Schedule of Goodwill and Intangible Assets [Line Items] | ||||||
Decrease in estimated fair value of real estate properties, percentage | 14.00% | |||||
Impairment of goodwill | $ 0 | $ 33,267,143 | $ 33,267,143 | |||
Intangible assets amortization expense | $ 471,790 | $ 446,921 | 1,397,529 | 1,372,910 | ||
Estimated amortization expense, April to December 2021 | 476,456 | 476,456 | ||||
Estimated amortization expense, 2022 | 1,905,826 | 1,905,826 | ||||
Estimated amortization expense, 2023 | 815,228 | 815,228 | ||||
Estimated amortization expense, 2024 | $ 728,499 | $ 728,499 | ||||
Investor list, net | ||||||
Schedule of Goodwill and Intangible Assets [Line Items] | ||||||
Impairment of intangible assets (excluding goodwill) | $ 1,305,260 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Assets Acquired (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 7,156,592 | $ 6,960,842 |
Accumulated amortization | (3,230,583) | (1,833,054) |
Net amount | $ 3,926,009 | 5,127,788 |
Investor list, net | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 5 years | |
Cost | $ 3,494,740 | 3,494,740 |
Web services technology, domains and licenses | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 3 years | |
Cost | $ 3,661,852 | $ 3,466,102 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS DETAILS - Tenant Receivables, Net (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Supplemental Balance Sheet Disclosure [Abstract] | ||
Straight-line rent | $ 5,399,340 | $ 4,344,388 |
Tenant rent | 98,363 | 204,775 |
Tenant reimbursements | 1,849,245 | 2,116,627 |
Total | $ 7,346,948 | $ 6,665,790 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS DETAILS - Accounts Payable, Accrued and Other Liabilities (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Supplemental Balance Sheet Disclosure [Abstract] | ||
Accounts payable | $ 1,214,828 | $ 1,136,954 |
Accrued expenses | 3,575,331 | 3,068,714 |
Accrued distributions | 786,120 | 706,106 |
Accrued interest payable | 611,507 | 629,628 |
Unearned rent | 1,591,992 | 2,033,065 |
Lease incentive obligation | 2,133,695 | 5,157 |
Total | $ 9,913,473 | $ 7,579,624 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 182,146,897 | |
Plus unamortized mortgage premium, net | 239,979 | |
Less unamortized deferred financing costs | (1,472,537) | |
Net principal | $ 180,914,339 | |
Loan to value ratio (as a percent) | 60.00% | |
Mortgages | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 182,146,897 | $ 176,948,438 |
Plus unamortized mortgage premium, net | 239,979 | 447,471 |
Less unamortized deferred financing costs | (1,472,537) | (1,469,991) |
Net principal | 180,914,339 | 175,925,918 |
Accredo property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 8,538,000 | 8,538,000 |
Debt instrument, stated interest rate | 3.80% | |
Debt instrument, effective interest rate | 3.80% | |
Six Dollar General properties | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 3,693,074 | 3,747,520 |
Debt instrument, stated interest rate | 4.69% | |
Debt instrument, effective interest rate | 4.69% | |
Dana property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 0 | 4,466,865 |
Debt instrument, stated interest rate | 4.56% | |
Debt instrument, effective interest rate | 4.56% | |
Northrop Grumman property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 6,971,012 | 5,518,589 |
Debt instrument, stated interest rate | 3.35% | |
Debt instrument, effective interest rate | 3.35% | |
exp US Services property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 3,272,333 | 3,321,931 |
Debt instrument, effective interest rate | 4.25% | |
exp US Services property | Initial Contractual Interest One | ||
Short Term Debt [LineItems] | ||
Interest rate at period start | 4.25% | |
exp US Services property | Treasury Bill Index | ||
Short Term Debt [LineItems] | ||
Debt instrument, stated interest rate | 3.25% | |
Harley Davidson property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 6,525,824 | 0 |
Debt instrument, stated interest rate | 425.00% | |
Debt instrument, effective interest rate | 4.25% | |
Wyndham property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 5,522,100 | 5,607,000 |
Debt instrument, effective interest rate | 4.34% | |
Wyndham property | LIBOR | ||
Short Term Debt [LineItems] | ||
Debt instrument, basis spread on variable rate | 2.05% | |
Wiiliams Sonoma property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 4,368,000 | 4,438,200 |
Debt instrument, effective interest rate | 4.34% | |
Wiiliams Sonoma property | LIBOR | ||
Short Term Debt [LineItems] | ||
Debt instrument, basis spread on variable rate | 2.05% | |
Omnicare property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 4,130,640 | 4,193,171 |
Debt instrument, stated interest rate | 4.36% | |
Debt instrument, effective interest rate | 4.36% | |
EMCOR property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 2,771,646 | 2,811,539 |
Debt instrument, stated interest rate | 4.35% | |
Debt instrument, effective interest rate | 4.35% | |
Husqvarna property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 6,379,182 | 6,379,182 |
Debt instrument, stated interest rate | 4.60% | |
Debt instrument, effective interest rate | 4.60% | |
Husqvarna property | Treasury Bill Index | ||
Short Term Debt [LineItems] | ||
Debt instrument, basis spread on variable rate | 2.45% | |
AvAir property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 19,950,000 | 19,950,000 |
Debt instrument, stated interest rate | 3.80% | |
Debt instrument, effective interest rate | 3.80% | |
3M property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 8,058,500 | 8,166,000 |
Debt instrument, effective interest rate | 5.09% | |
3M property | LIBOR | ||
Short Term Debt [LineItems] | ||
Debt instrument, basis spread on variable rate | 2.25% | |
Cummins property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 8,222,700 | 8,332,200 |
Debt instrument, effective interest rate | 5.16% | |
Cummins property | LIBOR | ||
Short Term Debt [LineItems] | ||
Debt instrument, basis spread on variable rate | 2.25% | |
Texas Health property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 4,304,825 | 4,363,203 |
Debt instrument, stated interest rate | 4.00% | |
Debt instrument, effective interest rate | 4.00% | |
Bon Secours property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 5,124,127 | 5,180,552 |
Debt instrument, stated interest rate | 5.41% | |
Debt instrument, effective interest rate | 5.41% | |
Costco property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 18,850,000 | 18,850,000 |
Debt instrument, stated interest rate | 4.85% | |
Debt instrument, effective interest rate | 4.85% | |
Taylor Fresh Foods | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 12,350,000 | 12,350,000 |
Debt instrument, stated interest rate | 3.85% | |
Debt instrument, effective interest rate | 3.85% | |
Levins property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 2,671,067 | 2,032,332 |
Debt instrument, stated interest rate | 3.75% | |
Debt instrument, effective interest rate | 3.75% | |
Dollar General Bakersfield property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 2,244,201 | 2,268,922 |
Debt instrument, stated interest rate | 3.65% | |
Debt instrument, effective interest rate | 3.65% | |
Labcorp | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 5,342,133 | 4,020,418 |
Debt instrument, stated interest rate | 3.75% | |
Debt instrument, effective interest rate | 3.75% | |
GSA (MSHA) property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 1,728,428 | 1,752,092 |
Debt instrument, stated interest rate | 3.65% | |
Debt instrument, effective interest rate | 3.65% | |
PreK Education property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 4,957,705 | 5,037,846 |
Debt instrument, stated interest rate | 4.25% | |
Debt instrument, effective interest rate | 4.25% | |
Solar Turbines, Amec Foster, ITW Rippey properties | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 9,044,276 | 9,214,700 |
Debt instrument, stated interest rate | 3.35% | |
Debt instrument, effective interest rate | 3.35% | |
Dollar General Big Spring property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 590,962 | 599,756 |
Debt instrument, stated interest rate | 4.50% | |
Debt instrument, effective interest rate | 4.50% | |
Gap property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 3,512,484 | 3,569,990 |
Debt instrument, stated interest rate | 4.15% | |
Debt instrument, effective interest rate | 4.15% | |
L3Harris | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 6,260,223 | 5,185,929 |
Debt instrument, stated interest rate | 3.35% | |
Debt instrument, effective interest rate | 3.35% | |
L3Harris | Prime Rate | ||
Short Term Debt [LineItems] | ||
Debt instrument, basis spread on variable rate | 0.25% | |
Sutter Health property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 13,669,395 | 13,879,655 |
Debt instrument, stated interest rate | 4.50% | |
Debt instrument, effective interest rate | 4.50% | |
Walgreens property | ||
Short Term Debt [LineItems] | ||
Mortgage notes payable | $ 3,094,060 | $ 3,172,846 |
Debt instrument, stated interest rate | 4.25% | |
Debt instrument, effective interest rate | 4.25% |
DEBT - Summary of Mortgage Note
DEBT - Summary of Mortgage Notes Payable (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Principal amount | $ 182,146,897 | |
Carrying Value | 180,914,339 | $ 175,925,918 |
Fair Value | 183,304,467 | 177,573,106 |
Mortgages | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 182,146,897 | $ 176,948,438 |
DEBT - Mortgage Notes Payable R
DEBT - Mortgage Notes Payable Related to Real Estate Investments Held For Sale, Net (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Mortgage notes payable | $ 182,146,897 | |
Plus unamortized mortgage premium | 239,979 | |
Less deferred financing costs | (1,472,537) | |
Net principal | 180,914,339 | |
Harley Davidson property | ||
Debt Instrument [Line Items] | ||
Mortgage notes payable | 6,525,824 | $ 0 |
Mortgages | ||
Debt Instrument [Line Items] | ||
Mortgage notes payable | 182,146,897 | 176,948,438 |
Plus unamortized mortgage premium | 239,979 | 447,471 |
Less deferred financing costs | (1,472,537) | (1,469,991) |
Net principal | $ 180,914,339 | 175,925,918 |
Mortgages | Secured Notes Payable, Real Estate Held-for-sale | ||
Debt Instrument [Line Items] | ||
Mortgage notes payable | 9,196,855 | |
Plus unamortized mortgage premium | 1,550 | |
Less deferred financing costs | (109,967) | |
Net principal | 9,088,438 | |
Mortgages | Secured Notes Payable, Real Estate Held-for-sale | Harley Davidson property | Retail | ||
Debt Instrument [Line Items] | ||
Mortgage notes payable | 6,623,346 | |
Mortgages | Secured Notes Payable, Real Estate Held-for-sale | EcoThrift | Industrial | ||
Debt Instrument [Line Items] | ||
Mortgage notes payable | $ 2,573,509 |
DEBT - Schedule of Line of Cred
DEBT - Schedule of Line of Credit Facilities (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Credit facility | $ 0 | $ 6,000,000 |
Less unamortized deferred financing costs | 0 | (21,724) |
Credit facility, net | $ 0 | $ 5,978,276 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | Mar. 31, 2021USD ($) | Mar. 29, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($)lease | Sep. 30, 2021lease | Sep. 30, 2021 | Sep. 30, 2021property | Jul. 09, 2021USD ($) | Dec. 31, 2020USD ($)property | Apr. 20, 2020USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |||||||||||
Debt instrument, fair value disclosure | $ 183,304,467 | $ 177,573,106 | |||||||||
Number of real estate properties, held-for-sale | 3 | 0 | 0 | 2 | |||||||
Outstanding balance of unsecured credit facility | 0 | $ 6,000,000 | |||||||||
Repayments of unsecured credit facility | 12,000,000 | $ 6,000,000 | |||||||||
Unamortized deferred financing costs | 0 | 21,724 | |||||||||
Maximum leverage ratio | 0.55 | ||||||||||
Credit Facility | Unsecured Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayments of unsecured credit facility | $ 6,000,000 | ||||||||||
Minimum | Credit Facility | Unsecured Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, interest rate during period | 4.75% | ||||||||||
Prime Rate | Credit Facility | Unsecured Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate | 100.00% | ||||||||||
New Credit Facility | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 22,000,000 | ||||||||||
Proceeds from credit facility | $ 6,000,000 | ||||||||||
Payments of debt issuance costs | $ 77,000 | ||||||||||
Unused commitment fee percentage | 0.15% | ||||||||||
Minimum debt service coverage ratio | 125.00% | ||||||||||
Minimum tangible net asset value | $ 120,000,000 | ||||||||||
New Credit Facility | Line of Credit | Revolving Credit Facility, Real Estate Acquisitions | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | 17,000,000 | ||||||||||
New Credit Facility | Line of Credit | Revolving Credit Facility, Working Capital | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | 5,000,000 | $ 5,000,000 | |||||||||
New Credit Facility | Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Unamortized deferred financing costs | $ 97,092 | ||||||||||
Loans, Mature on October 15, 2021 | Line of Credit | Unsecured Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Outstanding balance of unsecured credit facility | $ 6,000,000 | ||||||||||
Revolving Line of Credit Due by September 30, 2021 | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayments of unsecured credit facility | $ 6,000,000 | ||||||||||
Short-term Convertible Notes Payable | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 4,800,000 | ||||||||||
Short-term Other Notes Payable | Loan Agreement and Promissory Note, Paycheck Protection Program, CARES Act | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 517,000 |
DEBT - Maturities of Long-term
DEBT - Maturities of Long-term Debt (Details) | Sep. 30, 2021USD ($) |
Debt Instrument [Line Items] | |
October through December 2021 | $ 5,578,530 |
2022 | 11,173,350 |
2023 | 22,204,003 |
2024 | 31,565,888 |
2025 | 28,970,170 |
2026 | 26,484,067 |
Thereafter | 56,170,889 |
Total principal | 182,146,897 |
Plus unamortized mortgage premium, net of unamortized discount | 239,979 |
Less unamortized deferred financing costs | (1,472,537) |
Net principal | 180,914,339 |
Credit Facility | |
Debt Instrument [Line Items] | |
October through December 2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
Thereafter | 0 |
Total principal | 0 |
Plus unamortized mortgage premium, net of unamortized discount | 0 |
Less unamortized deferred financing costs | 0 |
Net principal | 0 |
Mortgage Notes Payable | |
Debt Instrument [Line Items] | |
October through December 2021 | 5,578,530 |
2022 | 11,173,350 |
2023 | 22,204,003 |
2024 | 31,565,888 |
2025 | 28,970,170 |
2026 | 26,484,067 |
Thereafter | 56,170,889 |
Total principal | 182,146,897 |
Plus unamortized mortgage premium, net of unamortized discount | 239,979 |
Less unamortized deferred financing costs | (1,472,537) |
Net principal | $ 180,914,339 |
DEBT - Interest Expense (Detail
DEBT - Interest Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||||
Interest expense | $ 1,831,545 | $ 2,732,528 | $ 5,711,330 | $ 9,196,061 | |
Prepayment penalties | 0 | 0 | (517,000) | 0 | |
(Gain) loss on interest rate swaps | (166,338) | (272,912) | (684,057) | 1,019,840 | |
Other | 504 | 12,998 | 49,622 | 78,226 | |
Accrued interest payable | 54,980 | 54,980 | $ 45,636 | ||
Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Interest expense | 27,486 | 128,333 | 169,571 | 449,791 | |
Amortization of deferred financing costs and mortgage premium, net | 16,605 | 42,288 | 60,468 | 117,624 | |
Mortgage Notes Payable | |||||
Debt Instrument [Line Items] | |||||
Interest expense | 1,812,254 | 2,154,363 | 5,638,890 | 6,454,546 | |
Amortization of deferred financing costs and mortgage premium, net | 141,235 | 435,179 | 355,661 | 693,810 | |
Prepayment penalties | 0 | 190,574 | 23,900 | 237,574 | |
(Gain) loss on interest rate swaps | $ (166,539) | $ (231,207) | $ (586,782) | $ 1,164,490 |
INTEREST RATE SWAP DERIVATIVE_2
INTEREST RATE SWAP DERIVATIVES - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($)instrument | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)instrument | Sep. 30, 2020USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
(Gain) loss on interest rate swaps | $ | $ 166,338 | $ 272,912 | $ 684,057 | $ (1,019,840) |
Interest Rate Swaps | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Number of mortgage notes payable | 4 | 4 | ||
Number of swap agreements terminated | 4 |
INTEREST RATE SWAP DERIVATIVE_3
INTEREST RATE SWAP DERIVATIVES - Derivative Instruments (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($)instrument | Sep. 30, 2020USD ($) | Jun. 30, 2021 | Sep. 30, 2021USD ($)instrument | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)instrument | |
GSA and EcoThrift | Swap | ||||||
Receivables with Imputed Interest [Line Items] | ||||||
Derivative, aggregate cost of hedge | $ 23,900 | |||||
Dinan Cars | Swap | ||||||
Receivables with Imputed Interest [Line Items] | ||||||
Derivative, aggregate cost of hedge | $ 99,200 | |||||
Rite Aid and Island Pacific | Swap | ||||||
Receivables with Imputed Interest [Line Items] | ||||||
Derivative, aggregate cost of hedge | $ 0 | $ 52,200 | ||||
Interest Rate Swaps | ||||||
Receivables with Imputed Interest [Line Items] | ||||||
Number of Instruments | instrument | 4 | 4 | 8 | |||
Notional Amount | $ 26,171,300 | $ 26,171,300 | $ 36,617,164 | |||
Weighted Average Fixed Pay Rate | 4.53% | 4.53% | 3.35% | |||
Weighted Average Remaining Term | 2 years 2 months 12 days | 2 years 3 months 18 days | ||||
Minimum | ||||||
Receivables with Imputed Interest [Line Items] | ||||||
Notional Amount | $ 24,935,999 | $ 24,935,999 | $ 34,989,063 | |||
LIBOR | Minimum | Interest Rate Swaps | ||||||
Receivables with Imputed Interest [Line Items] | ||||||
Reference Rate | 4.05% | 4.05% | 3.13% | |||
LIBOR | Maximum | Interest Rate Swaps | ||||||
Receivables with Imputed Interest [Line Items] | ||||||
Reference Rate | 5.16% | 5.16% | 5.16% |
INTEREST RATE SWAP DERIVATIVE_4
INTEREST RATE SWAP DERIVATIVES - Statement of Financial Position (Details) | Sep. 30, 2021USD ($)instrument | Dec. 31, 2020USD ($)instrument |
Derivatives, Fair Value [Line Items] | ||
Fair Value | $ | $ (1,073,998) | $ (1,743,889) |
Interest Rate Swaps | ||
Derivatives, Fair Value [Line Items] | ||
Number of Instruments | instrument | 4 | 8 |
Interest Rate Swaps | Liability | ||
Derivatives, Fair Value [Line Items] | ||
Number of Instruments | instrument | 4 | 8 |
Fair Value | $ | $ (1,073,998) | $ (1,743,889) |
Interest Rate Swaps | Assets | ||
Derivatives, Fair Value [Line Items] | ||
Number of Instruments | instrument | 0 | 0 |
Fair Value | $ | $ 0 | $ 0 |
PREFERRED STOCK (Details)
PREFERRED STOCK (Details) - USD ($) | Nov. 11, 2021 | Sep. 17, 2021 | Sep. 14, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Subsidiary, Sales of Stock [Line Items] | |||||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |||||
Preferred stock, shares outstanding (in shares) | 2,000,000 | 2,000,000 | |||||
Issuance of preferred stock, net | $ 47,570,374 | $ 0 | |||||
Payments of stock issuance costs | (946,914) | (981,748) | |||||
Accrued dividends | $ 1,981,725 | $ 2,135,815 | $ 5,949,912 | $ 9,595,208 | |||
Series A Preferred Stock | |||||||
Subsidiary, Sales of Stock [Line Items] | |||||||
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 | |||||
Preferred stock, shares issued (in shares) | 2,000,000 | 2,000,000 | |||||
Preferred stock, liquidation preference per share | $ 25 | ||||||
Sale of stock, price per share | $ 25 | ||||||
Preferred stock, discount on shares | $ 1,575,000 | ||||||
Payments of stock issuance costs | (854,626) | ||||||
Preferred stock, dividend rate, percentage | 7.375% | ||||||
Preferred stock, dividends per share, declared | $ 1.84375 | ||||||
Preferred stock, redemption price per share | $ 25 | 25 | |||||
Preferred stock, dividend rate, per-dollar-amount | 2.34375 | ||||||
Cumulative dividends per quarter | $ 0.460938 | ||||||
Accrued dividends | $ 143,403 | ||||||
Series A Preferred Stock | Subsequent Event | |||||||
Subsidiary, Sales of Stock [Line Items] | |||||||
Dividends, preferred stock | $ 1,065,278 | ||||||
Series A Preferred Stock | Maximum | |||||||
Subsidiary, Sales of Stock [Line Items] | |||||||
Preferred stock, dividend rate, percentage | 9.375% | ||||||
Series A Preferred Stock | Dividend Rate | |||||||
Subsidiary, Sales of Stock [Line Items] | |||||||
Preferred stock, dividend rate, percentage | 2.00% | ||||||
Series A Preferred Stock | Primary Offering | |||||||
Subsidiary, Sales of Stock [Line Items] | |||||||
Shares sold in offering (in shares) | 1,800,000 | ||||||
Common stock issued, consideration received on transaction | $ 50,000,000 | ||||||
Issuance of preferred stock, net | $ 47,570,374 | ||||||
Series A Preferred Stock | Over-Allotment Option | |||||||
Subsidiary, Sales of Stock [Line Items] | |||||||
Shares sold in offering (in shares) | 200,000 |
RELATED PARTY TRANSACTIONS - Bo
RELATED PARTY TRANSACTIONS - Board of Directors Compensation (Details) - Director - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Related Party Transaction [Line Items] | ||||
Value of shares issued for services rendered | $ 95,000 | $ 82,500 | $ 275,000 | $ 255,833 |
Total | $ 120,000 | $ 101,250 | $ 360,000 | $ 305,833 |
Common stock issued to board of directors (in shares) | 3,647 | 3,929 | 12,168 | 11,022 |
Cash paid for services rendered | ||||
Related Party Transaction [Line Items] | ||||
Cash paid for services rendered | $ 25,000 | $ 18,750 | $ 85,000 | $ 50,000 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) | Aug. 28, 2020USD ($) | Jul. 31, 2020USD ($) | Mar. 02, 2020USD ($)property | Jul. 31, 2020USD ($)shares | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Apr. 23, 2020USD ($) | Dec. 31, 2019USD ($)notesPayable |
Related Party Transaction [Line Items] | ||||||||||
Payments to independent member of Company's board of directors for services rendered | $ 31,250 | |||||||||
Board of Directors Chairman | Secured Notes Payable | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due to related parties | $ 630,820 | |||||||||
Related party transaction rate | 10.00% | |||||||||
Number of notes payable | notesPayable | 2 | |||||||||
Balloon payment due at maturity | $ 437,862 | |||||||||
Board of Directors Chairman | Secured Notes Payable, Note Two | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Balloon payment due at maturity | 218,931 | |||||||||
Board of Directors Chairman | Secured Notes Payable, Note One | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Balloon payment due at maturity | $ 218,931 | |||||||||
Santa Clara | Advisor fees | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amount paid for related party transactions | $ 47,984 | $ 47,984 | $ 95,967 | $ 95,967 | ||||||
Wirta Trust | Board of Directors Chairman | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Notes payable, related party | $ 4,000,000 | |||||||||
Number of real estate properties under mortgages | property | 2 | |||||||||
Related party transaction rate | 8.00% | |||||||||
Wirta Trust | Board of Directors Chairman | Chevron Gas Station, San Jose property | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Repayments of related party debt | $ 2,000,000 | |||||||||
Wirta Trust | Board of Directors Chairman | Chevron Gas Station, Roseville property | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Repayments of related party debt | $ 2,000,000 | |||||||||
Class C | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares issued for services rendered (in shares) | shares | 4,821 | |||||||||
Director | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due to related parties | $ 101,250 | $ 101,250 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES [Line Items] | ||
Tenant reimbursements | $ 189,136 | $ 60,598 |
Restricted cash | $ 2,410,951 | 129,118 |
Maximum | ||
COMMITMENTS AND CONTINGENCIES [Line Items] | ||
Shares authorized to be repurchased per month (as a percent) | 2.00% | |
Shares authorized to be repurchased per quarter (as a percent) | 5.00% | |
Building Improvements, Tenant Improvements And Leasing Commissions | ||
COMMITMENTS AND CONTINGENCIES [Line Items] | ||
Restricted cash | $ 2,271,462 | $ 92,684 |
OPERATING PARTNERSHIP UNITS - N
OPERATING PARTNERSHIP UNITS - Narrative (Details) | Feb. 01, 2021shares | Jan. 25, 2021$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Mar. 31, 2021 | Sep. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Aug. 04, 2021$ / shares | May 05, 2021$ / shares | Jan. 27, 2021$ / shares | Dec. 31, 2019USD ($)$ / sharesshares |
Business Acquisition [Line Items] | ||||||||||||
Net asset value (in usd per share) | $ / shares | $ 26.05 | $ 24.61 | $ 23.03 | $ 30.48 | ||||||||
Conversion ratio | 0.3333 | |||||||||||
Class C | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Conversion ratio | 1 | 1 | ||||||||||
Class M OP Units | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Other ownership interests, units issued (in shares) | 657,949.5 | 657,949.5 | ||||||||||
Net asset value (in usd per share) | $ / shares | $ 45.48 | $ 45.48 | ||||||||||
Conversion ratio | 1.6667 | 1 | 1.6667 | |||||||||
Class P OP Units | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Other ownership interests, units issued (in shares) | 56,029 | 56,029 | 56,029 | |||||||||
Stock compensation expense | $ | $ 88,783 | $ 88,784 | $ 266,350 | $ 266,350 | ||||||||
Class P OP Units | Messrs. Halfacre and Pacini | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Other ownership interests, units issued (in shares) | 29,711 | |||||||||||
Other ownership interests, capital account | $ | $ 887,835 | $ 887,835 | $ 1,509,319 | |||||||||
Other ownership interests, amortization period | 51 months | |||||||||||
Class M OP Units and Class P OP Units | Operating Partnership | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Noncontrolling interest (as a percent) | 13.00% | |||||||||||
Class R OP Units | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Other ownership interests, units issued (in shares) | 353,003 | 353,003 | ||||||||||
Other ownership interests, capital account | $ | $ 5,421,040 | $ 5,421,040 | ||||||||||
Stock compensation expense | $ | $ 559,827 | $ 1,573,991 | ||||||||||
Other ownership interests, units issued, period | 3 years | |||||||||||
Other ownership interests, earnings per share, diluted, threshold (in usd per share) | $ / shares | $ 1.05 | |||||||||||
Other ownership interests, units outstanding (in shares) | 360,000 | |||||||||||
Conversion ratio | 1 | |||||||||||
Potential future conversion ratio | 0.4000 | |||||||||||
Class R OP Units | Mr. Halfacre | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Other ownership interests, units issued (in shares) | 120,000 | |||||||||||
Other ownership interests, units issued, period | 3 years | |||||||||||
Other ownership interests, units outstanding (in shares) | 210,667 | |||||||||||
Class R OP Units | Mr. Pacini | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Other ownership interests, units issued, period | 3 years | |||||||||||
Other ownership interests, units outstanding (in shares) | 33,333 | |||||||||||
Class R OP Units | Employees of Company | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Other ownership interests, units issued (in shares) | 348,000 | |||||||||||
Other ownership interests, units outstanding (in shares) | 116,000 | |||||||||||
Class R OP Units, Future Compensation | Mr. Halfacre | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Other ownership interests, units issued (in shares) | 512,000 | |||||||||||
Class R OP Units, Future Compensation | Mr. Pacini | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Other ownership interests, units issued (in shares) | 100,000 | |||||||||||
BrixInvest | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Contribution of Class M OP Units and Class P OP Units | $ | $ 50,603,000 | |||||||||||
BrixInvest | Class M OP Units | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Other ownership interests, units issued (in shares) | 657,949.5 | |||||||||||
BrixInvest | Class P OP Units | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Other ownership interests, units issued (in shares) | 26,318 |
OPERATING PARTNERSHIP UNITS - C
OPERATING PARTNERSHIP UNITS - Class M OP Units Conversion (Details) $ / shares in Units, $ in Millions | Feb. 01, 2021 | Sep. 30, 2021USD ($)$ / shares |
Conversion of Stock [Line Items] | ||
Conversion ratio | 0.3333 | |
Fiscal Year 2021 | ||
Conversion of Stock [Line Items] | ||
Early conversion ratio | 0.50 | |
AUM conversion threshold | $ | $ 860 | |
AFFO conversion threshold (in usd per share) | $ / shares | $ 1.77 | |
Conversion ratio | 1.9167 | |
Fiscal Year 2022 | ||
Conversion of Stock [Line Items] | ||
Early conversion ratio | 0.60 | |
AUM conversion threshold | $ | $ 1,175 | |
AFFO conversion threshold (in usd per share) | $ / shares | $ 1.95 | |
Conversion ratio | 2.5000 | |
Fiscal Year 2023 | ||
Conversion of Stock [Line Items] | ||
Early conversion ratio | 0.70 | |
AUM conversion threshold | $ | $ 1,551 | |
AFFO conversion threshold (in usd per share) | $ / shares | $ 2.10 | |
Conversion ratio | 3 | |
Initial Period | ||
Conversion of Stock [Line Items] | ||
Conversion ratio | 1.6667 |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) | Nov. 12, 2021USD ($)lease | Nov. 11, 2021USD ($) | Oct. 29, 2021USD ($) | Oct. 27, 2021USD ($) | Oct. 25, 2021USD ($)$ / shares | Oct. 01, 2021USD ($)shares | Dec. 31, 2021USD ($)dayproperty | Dec. 31, 2021USD ($)dayproperty | Jan. 31, 2022USD ($)propertyday | Nov. 24, 2021$ / shares | Sep. 30, 2021USD ($)$ / shares | Aug. 04, 2021$ / shares | May 05, 2021$ / shares | Jan. 27, 2021$ / shares | Dec. 31, 2020USD ($) | Dec. 31, 2019$ / shares |
Subsequent Event [Line Items] | ||||||||||||||||
Net asset value (in usd per share) | $ / shares | $ 26.05 | $ 24.61 | $ 23.03 | $ 30.48 | ||||||||||||
Accrued distributions | $ 786,120 | $ 706,106 | ||||||||||||||
Class C and Class S | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Net asset value (in usd per share) | $ / shares | $ 27.29 | |||||||||||||||
Subsequent Event | Proposed KeyBank Credit Facility | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Maximum borrowing capacity | $ 225,000,000 | |||||||||||||||
Subsequent Event | Forecast | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Period for due diligence | day | 30 | |||||||||||||||
Period to complete sale | day | 60 | |||||||||||||||
Properties to be sold | property | 3 | |||||||||||||||
Remaining lease term | 5 years | |||||||||||||||
Subsequent Event | Forecast | Crowdfunding-Related Intangible Assets | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Impairment of intangible assets | $ 3,700,000 | |||||||||||||||
Subsequent Event | L3Harris | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Discount term | 2 months | |||||||||||||||
Discount amount | $ 139,258 | |||||||||||||||
Lease commissions | $ 208,087 | |||||||||||||||
Subsequent Event | 3M property | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Lease commissions | $ 640,696 | |||||||||||||||
Tenant improvement allowance | 1,026,000 | |||||||||||||||
Subsequent Event | Walgreens | Forecast | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Contract purchase price | $ 28,651,000 | |||||||||||||||
Subsequent Event | Walgreens | Forecast | Ten Retail Properties Leased To Walgreen's | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Asset acquisition, consideration transferred | $ 63,100,000 | |||||||||||||||
Number of retail properties acquired | property | 10 | 10 | ||||||||||||||
Asset acquisition, consideration transferred, liabilities incurred | $ 35,048,994 | $ 35,048,994 | ||||||||||||||
Subsequent Event | Texas Health | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Period for due diligence | day | 30 | 30 | ||||||||||||||
Period to complete sale | day | 10 | 10 | ||||||||||||||
Subsequent Event | Texas Health | Forecast | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Disposal group, including discontinued operation, consideration | $ 15,300,000 | $ 15,300,000 | $ 27,240,000 | |||||||||||||
Subsequent Event | Industrial Property In Archbold, Ohio | Industrial Property For Manufacturing | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Asset acquisition, consideration transferred | $ 11,460,000 | |||||||||||||||
Subsequent Event | Bon Secours and Omnicare | Forecast | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Properties to be sold | property | 2 | |||||||||||||||
Subsequent Event | Class C | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common stock redeemed (in shares) | shares | 80,614 | |||||||||||||||
Common stock redeemed during period | $ 2,098,452 | |||||||||||||||
Subsequent Event | Class S | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common stock redeemed (in shares) | shares | 0 | |||||||||||||||
Subsequent Event | Class C and Class S | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Dividends, common stock | $ 643,025 | |||||||||||||||
Daily distribution rate (in usd per share) | $ / shares | $ 0.00287670 | |||||||||||||||
Annualized distribution rate (in usd per share) | $ / shares | $ 1.05 | $ 1.15 | ||||||||||||||
Net asset value, percentage | 4.03% | 4.21% | ||||||||||||||
Subsequent Event | Class C and Class S | Forecast | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Daily distribution rate (in usd per share) | $ / shares | $ 0.00315070 | |||||||||||||||
Subsequent Event | Series A Preferred Stock | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Dividends, preferred stock | $ 1,065,278 | |||||||||||||||
Accrued distributions | $ 143,403 | |||||||||||||||
Subsequent Event | Line of Credit | Revolving Credit Facility | Proposed KeyBank Credit Facility | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Debt instrument, term | 4 years | |||||||||||||||
Extension option | lease | 12 | |||||||||||||||
Subsequent Event | Term Loan | Proposed KeyBank Credit Facility | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Debt instrument, term | 5 years |