Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 15, 2022 | Jun. 30, 2020 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 001-38719 | ||
Entity Registrant Name | MEDALIST DIVERSIFIED REIT, INC. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 47-5201540 | ||
Entity Address, Address Line One | 1051 E. Cary Street Suite 601 | ||
Entity Address, City or Town | Richmond | ||
Entity Address, State or Province | VA | ||
Entity Address, Postal Zip Code | 23219 | ||
City Area Code | 804 | ||
Local Phone Number | 344-4435 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 21,260,484 | ||
Entity Common Stock, Shares Outstanding | 16,361,337 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001654595 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Auditor Name | Cherry Bekaert LLP | ||
Auditor Firm ID | 677 | ||
Auditor Location | Richmond, Virginia | ||
Common Stock, $0.01 par value per share | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Security Exchange Name | NASDAQ | ||
Trading Symbol | MDRR | ||
8.0% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share | |||
Document Information [Line Items] | |||
Title of 12(b) Security | 8.0% Series A Cumulative Redeemable Preferred Stock,$0.01 par value per share | ||
Security Exchange Name | NASDAQ | ||
Trading Symbol | MDRRP |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Investment properties, net | $ 69,407,915 | $ 57,055,862 |
Cash | 4,370,405 | 2,862,994 |
Restricted cash | 3,013,572 | 2,233,934 |
Rent and other receivables, net of allowance of $13,010 and $4,693, as of December 31, 2021 and 2020, respectively | 466,141 | 458,752 |
Assets held for sale | 9,846,208 | 12,410,250 |
Unbilled rent | 872,322 | 673,728 |
Intangible assets, net | 4,200,392 | 3,256,362 |
Other assets | 370,133 | 319,890 |
Total Assets | 92,547,088 | 79,271,772 |
LIABILITIES | ||
Accounts payable and accrued liabilities | 1,307,257 | 1,308,056 |
Intangible liabilities, net | 1,880,612 | 1,022,497 |
Line of credit, short term, net | 325,000 | |
Notes payable | 176,300 | |
Convertible debentures, net | 2,260,565 | |
Mortgages payable, net | 54,517,822 | 48,094,354 |
Mortgages payable, net, associated with assets held for sale | 7,615,368 | 10,352,000 |
Mandatorily redeemable preferred stock, net | 4,227,640 | 4,023,257 |
Total Liabilities | 69,548,699 | 67,562,029 |
EQUITY | ||
Common stock, 16,052,617 and 4,803,445 shares issued and outstanding at December 31, 2021 and 2020, respectively | 160,526 | 48,032 |
Additional paid-in capital | 49,645,426 | 33,105,099 |
Offering costs | (3,350,946) | (2,992,357) |
Accumulated deficit | (24,981,346) | (19,298,987) |
Total Stockholders' Equity | 21,473,660 | 10,861,787 |
Noncontrolling interests - Operating Partnership | 877,917 | 882,555 |
Total Equity | 22,998,389 | 11,709,743 |
Total Liabilities and Equity | 92,547,088 | 79,271,772 |
Hampton Inn Property | ||
EQUITY | ||
Noncontrolling interests | (224,383) | |
Hanover Square Property | ||
EQUITY | ||
Noncontrolling interests | 146,603 | 189,784 |
Parkway Property | ||
EQUITY | ||
Noncontrolling interests | $ 500,209 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Rent and other receivables, net of allowance | $ 13,010 | $ 4,693 |
Common stock, shares, issued | 16,052,617 | 4,803,445 |
Common stock, shares, outstanding | 16,052,617 | 4,803,445 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
REVENUE | ||
Total Revenue | $ 11,472,549 | $ 9,276,160 |
OPERATING EXPENSES | ||
Retail center property operating expenses | 1,518,973 | 1,362,532 |
Flex center property operating expenses | 343,717 | 231,209 |
Hotel property operating expenses | 3,102,951 | 3,164,646 |
Bad debt expense | 39,024 | 431,143 |
Share based compensation expenses | 149,981 | 569,995 |
Legal, accounting and other professional fees | 1,465,199 | 1,258,863 |
Corporate general and administrative expenses | 654,137 | 300,641 |
Loss on impairment | 223,097 | |
Impairment of assets held for sale | 3,494,058 | |
Depreciation and amortization | 3,508,704 | 3,981,874 |
Total Operating Expenses | 10,782,686 | 15,018,058 |
Gain on disposal of investment properties | 124,641 | 0 |
Operating income (loss) | 814,504 | (5,741,898) |
Interest expense | 5,534,255 | 3,960,626 |
Net Loss from Operations | (4,719,751) | (9,702,524) |
Other income | 361,469 | 120,982 |
Net Loss | (4,358,282) | (9,581,542) |
Less: Net income (loss) attributable to Operating Partnership noncontrolling interests | 3,903 | (246,001) |
Net Loss Attributable to Medalist Common Shareholders | $ (4,364,264) | $ (8,180,609) |
Loss per share from operations - basic | $ (0.33) | $ (1.74) |
Weighted-average number of shares - basic and diluted | 13,092,937 | 4,709,980 |
Loss per share from operations - diluted | $ (0.33) | $ (1.74) |
Weighted-average number of shares - basic | 13,092,937 | 4,709,980 |
Weighted-average number of shares - diluted | 13,092,937 | 4,709,980 |
Dividends paid per common share | $ 0.04 | $ 0.125 |
Hampton Inn Property | ||
REVENUE | ||
Total Revenue | $ 1,941,083 | $ 1,758,682 |
OPERATING EXPENSES | ||
Hotel property operating expenses | 1,701,451 | 1,755,684 |
Depreciation and amortization | 677,560 | |
Total Operating Expenses | 1,701,451 | 2,433,244 |
Gain on disposal of investment properties | 124,641 | |
Operating income (loss) | 364,273 | (674,562) |
Interest expense | 475,844 | 811,214 |
Net Loss from Operations | (111,571) | (1,485,776) |
Other income | 178,166 | (10,697) |
Less: Net income (loss) attributable to noncontrolling interests | 14,651 | (1,131,765) |
Net Loss Attributable to Medalist Common Shareholders | 51,944 | (364,708) |
Hanover Square Property | ||
OPERATING EXPENSES | ||
Interest expense | 451,833 | 445,875 |
Less: Net income (loss) attributable to noncontrolling interests | (8,781) | (23,167) |
Parkway Property | ||
OPERATING EXPENSES | ||
Less: Net income (loss) attributable to noncontrolling interests | (3,791) | 0 |
Retail center property revenues | ||
REVENUE | ||
Total Revenue | 4,719,289 | 4,284,779 |
Retail center property tenant reimbursements | ||
REVENUE | ||
Total Revenue | 915,107 | 867,371 |
Flex center property revenues | ||
REVENUE | ||
Total Revenue | 934,230 | 559,641 |
Flex center property tenant reimbursements | ||
REVENUE | ||
Total Revenue | 268,592 | 227,193 |
Hotel property room revenues | ||
REVENUE | ||
Total Revenue | 4,590,372 | 3,207,405 |
Hotel property room revenues | Hampton Inn Property | ||
REVENUE | ||
Total Revenue | 1,912,809 | 1,697,432 |
Hotel property other revenues | ||
REVENUE | ||
Total Revenue | 44,959 | 129,771 |
Hotel property other revenues | Hampton Inn Property | ||
REVENUE | ||
Total Revenue | $ 28,274 | $ 61,250 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock | Additional Paid in Capital | Offering Costs. | Accumulated Deficit | Total Shareholders' Equity | Noncontrolling InterestsHampton Inn Property | Noncontrolling InterestsHanover Square Property | Noncontrolling InterestsParkway Property | Noncontrolling Interest Operating Partnership | Total |
Balance at Dec. 31, 2019 | $ 45,003 | $ 31,702,345 | $ (2,992,357) | $ (10,555,841) | $ 18,199,150 | $ 1,282,782 | $ 540,791 | $ 830,512 | $ 20,853,235 | |
Balance (shares) at Dec. 31, 2019 | 4,500,302 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Common stock issuances | $ 500 | 122,500 | 123,000 | 123,000 | ||||||
Common stock issuances (shares) | 50,000 | |||||||||
Share based compensation | $ 2,478 | 567,517 | 569,995 | 569,995 | ||||||
Share based compensation (shares) | 247,824 | |||||||||
Operating partnership unit conversion | $ 53 | 49,947 | 50,000 | (50,000) | ||||||
Operating partnership unit conversion (in shares) | 5,319 | |||||||||
Convertible debenture beneficial conversion feature | 662,788 | 662,788 | 662,788 | |||||||
Net (loss) income | (8,180,609) | (8,180,609) | (1,131,765) | (23,167) | (246,001) | (9,581,542) | ||||
Dividends and distributions | (562,537) | (562,537) | (327,840) | (27,356) | (917,733) | |||||
Non-controlling interests | (375,400) | 375,400 | ||||||||
Balance at Dec. 31, 2020 | $ 48,034 | 33,105,097 | (2,992,357) | (19,298,987) | 10,861,787 | (224,383) | 189,784 | 882,555 | 11,709,743 | |
Balance (shares) at Dec. 31, 2020 | 4,803,445 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Common stock issuances | $ 80,000 | 11,080,000 | 11,160,000 | 11,160,000 | ||||||
Common stock issuances (shares) | 8,000,000 | |||||||||
Share based compensation | $ 673 | 149,308 | 149,981 | 149,981 | ||||||
Share based compensation (shares) | 67,256 | |||||||||
Convertible debenture beneficial conversion feature | 284,052 | 284,052 | 284,052 | |||||||
Conversion of convertible debentures | $ 31,819 | 5,026,969 | 5,058,788 | 5,058,788 | ||||||
Conversion of convertible debentures (in shares) | 3,181,916 | |||||||||
Offering costs | (358,589) | (358,589) | (358,589) | |||||||
Net (loss) income | (4,364,264) | (4,364,264) | 14,651 | (8,781) | $ (3,791) | 3,903 | (4,358,282) | |||
Dividends and distributions | (642,105) | (642,105) | (466,258) | (34,400) | (8,541) | (1,151,304) | ||||
Non-controlling interests | (675,990) | (675,990) | $ 675,990 | 504,000 | 504,000 | |||||
Balance at Dec. 31, 2021 | $ 160,526 | $ 49,645,426 | $ (3,350,946) | $ (24,981,346) | $ 21,473,660 | $ 146,603 | $ 500,209 | $ 877,917 | $ 22,998,389 | |
Balance (shares) at Dec. 31, 2021 | 16,052,617 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (4,358,282) | $ (9,581,542) |
Adjustments to reconcile consolidated net loss to net cash flows from operating activities | ||
Depreciation | 2,415,139 | 3,067,556 |
Amortization | 1,093,565 | 914,318 |
Loan cost amortization | 103,180 | 279,951 |
Mandatorily redeemable preferred stock issuance cost and discount amortization | 204,383 | 162,375 |
Convertible debenture issuance cost, discount and beneficial conversion feature amortization | 1,718,487 | 119,870 |
Amortization of tenant inducements | 7,100 | |
Above (below) market lease amortization, net | (24,024) | 6,142 |
Bad debt expense | 39,024 | 431,143 |
Note payable forgiveness | (176,300) | (129,600) |
Share-based compensation | 149,981 | 569,995 |
Impairment of assets held for sale | 3,494,058 | |
Loss on impairment | 223,097 | |
Gain on sale of investment property | (124,641) | 0 |
Changes in assets and liabilities | ||
Rent and other receivables, net | (46,413) | (740,513) |
Unbilled rent | (198,594) | (212,840) |
Other assets | (50,243) | (38,955) |
Accounts payable and accrued liabilities | 87,351 | (257,089) |
Net cash flows from operating activities | 832,613 | (1,684,934) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Investment property acquisitions, net of cash acquired and assumed debt | (20,750,571) | |
Capital expenditures | (536,685) | (414,361) |
Cash received from disposal of investment properties | 2,144,529 | |
Net cash flows from investing activities | (19,142,727) | (414,361) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Dividends and distributions paid | (1,151,304) | (917,733) |
Investment of noncontrolling interests | 504,000 | |
Proceeds from line of credit, short term, net | 550,000 | |
Repayment of line of credit, short term | (325,000) | (2,225,000) |
Repayment of related party notes payable, short term | (852,000) | |
Proceeds from notes payable | 305,900 | |
Proceeds from mortgages payable, net | 24,377,886 | 1,938,697 |
Repayment of mortgages payable | (14,914,830) | (463,196) |
Proceeds from sale of mandatorily preferred stock, net of capitalized offering costs | 3,860,882 | |
Proceeds from sale of convertible debentures, net of capitalized offering costs | 1,305,000 | 2,926,483 |
Proceeds from sales of common stock, net of capitalized offering costs | 10,801,411 | |
Net cash flows from financing activities | 20,597,163 | 5,124,033 |
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 2,287,049 | 3,024,738 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 5,096,928 | 2,072,190 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | $ 7,383,977 | $ 5,096,928 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows - Supplemental cash flow information - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Additional Cash Flow Elements and Supplemental Disclosures and Non-Cash Activities | ||
CASH AND CASH EQUIVALENTS, end of period, shown in consolidated balance sheets | $ 4,370,405 | $ 2,862,994 |
RESTRICTED CASH including assets restricted for capital and operating reserves and tenant deposits, end of period, shown in consolidated balance sheets | 3,013,572 | 2,233,934 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period shown in the consolidated statements of cash flows | 7,383,977 | 5,096,928 |
Other cash transactions: | ||
Interest paid | 4,065,121 | 3,276,544 |
Non-cash transactions: | ||
Conversion of convertible debentures and accrued interest to common stock | 5,058,788 | |
Transfer of investment properties, net to assets held for sale, net | 9,683,555 | |
Transfer of mortgages payable, net to mortgages payable associated with assets held for sale, net | 7,592,931 | |
Assumption of mortgage debt, net | 4,481,600 | |
Forgiveness of note payable | 176,300 | 129,600 |
Exchange for 7.55 percent of the noncontrolling interest in the Hampton Inn Property | 867,000 | 867,000 |
Exchange for 3.00 percent of the noncontrolling interest in the Hampton Inn Property | 1,021,960 | |
Issuance of operating partnership interests in exchange for 3.45 percent of the noncontrolling interest in the Hampton Inn Property | 375,400 | |
Conversion of operating partnership units to common shares | $ 123,000 | $ 123,000 |
Consolidated Statements of Ca_3
Consolidated Statements of Cash Flows (Parenthetical) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Percentage of noncontrolling interest exchanged for issuance of operating partnership interest | 3.45% | 3.45% |
7.55 % Hampton Inn Property | ||
Percentage of noncontrolling interest exchanged | 7.55% | 7.55% |
3.00 % Hampton Inn Property | ||
Percentage of noncontrolling interest exchanged | 3.00% | 3.00% |
Organization and Basis of Prese
Organization and Basis of Presentation and Consolidation | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Basis of Presentation and Consolidation | |
Organization and Basis of Presentation and Consolidation | 1. Organization and Basis of Presentation and Consolidation Medalist Diversified Real Estate Investment Trust, Inc. (the “REIT”) is a Maryland corporation formed on September 28, 2015. Beginning with the taxable year ended December 31, 2017, the REIT has elected to be taxed as a real estate investment trust for federal income tax purposes. The REIT serves as the general partner of Medalist Diversified Holdings, LP (the “Operating Partnership”) which was formed as a Delaware limited partnership on September 29, 2015. As of December 31, 2021, the REIT, through the Operating Partnership, owned and operated eight properties, the Shops at Franklin Square, a 134,239 square foot retail property located in Gastonia, North Carolina (the “Franklin Square Property”), the Shops at Hanover Square North (the “Hanover Square Property”), a 73,440 square foot retail property located in Mechanicsville, Virginia, the Ashley Plaza Shopping Center (the “Ashley Plaza Property”), a 160,356 square foot retail property located in Goldsboro, North Carolina, the Clemson Best Western University Inn (the “Clemson Best Western Property”), a hotel with 148 rooms on 5.92 acres in Clemson, South Carolina, Brookfield Center, a 64,880 square foot mixed-use industrial/office property located in Greenville, South Carolina (the “Brookfield Center Property”), the Lancer Center, a 178,626 square foot retail property located in Lancaster, South Carolina (the “Lancer Center Property”), the Greenbrier Business Center, an 89,290 square foot mixed-use industrial/office property located in Chesapeake, Virginia (the “Greenbrier Business Center Property”) and the Parkway Property, a 64,109 square foot mixed-use industrial office property located in Virginia Beach, Virginia (the “Parkway Property”). The Company owns 84 percent of the Hanover Square Property as a tenant in common with a noncontrolling owner which owns the remaining 16 percent interest and 82 percent of the Parkway Property as a tenant in common with a noncontrolling owner which owns the remaining 18 percent interest. The use of the word “Company” refers to the REIT and its consolidated subsidiaries, except where the context otherwise requires. The Company includes the REIT, the Operating Partnership, wholly owned limited liability corporations which own or operate the properties, and the taxable REIT subsidiaries which operate the Clemson Best Western Property and formerly operated the Hampton Inn Property. As a REIT, certain tax laws limit the amount of “non-qualifying” income that Company can earn, including income derived directly from the operation of hotels. As a result, the Company leases its consolidated hotel properties to taxable REIT subsidiaries (“TRS”) for federal income tax purposes. The TRS subsidiaries are subject to income tax and are not limited as to the amount of nonqualifying income they can generate, but they are limited in terms of their value as a percentage of the total value of the Company’s assets. The TRS subsidiaries enter into agreements with a third party to manage the operations of the hotel. The Company prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). References to the consolidated financial statements and references to individual financial statements included herein, reference the consolidated financial statements or the respective individual financial statement. All material balances and transactions between the consolidated entities of the Company have been eliminated. The Company was formed to acquire, reposition, renovate, lease and manage income-producing properties, with a primary focus on (i) commercial properties, including flex-industrial, limited-service hotels, and retail properties, and (ii) multi-family residential properties in secondary and tertiary markets in the southeastern part of the United States, with an expected concentration in Virginia, North Carolina, South Carolina, Georgia, Florida and Alabama. The Company may also pursue, in an opportunistic manner, other real estate-related investments, including, among other things, equity or other ownership interests in entities that are the direct or indirect owners of real property, indirect investments in real property, such as those that may be obtained in a joint venture. While these types of investments are not intended to be a primary focus, the Company may make such investments in its Manager’s discretion. The Company is externally managed by Medalist Fund Manager, Inc. (the “Manager”). The Manager makes all investment decisions for the Company. The Manager and its affiliated companies specialize in acquiring, developing, owning and managing value-added commercial real estate in the Mid-Atlantic and Southeast regions. The Manager oversees the Company’s overall business and affairs and has broad discretion to make operating decisions on behalf of the Company and to make investment decisions. The Company’s stockholders are not involved in its day-to-day affairs. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Investment Properties The Company has adopted Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805) Accounting Standards Codification (“ASC”) 805 mandates that “an acquiring entity shall allocate the cost of an acquired entity to the assets acquired and liabilities assumed based on their estimated fair values at date of acquisition.” ASC 805 results in an allocation of acquisition costs to both tangible and intangible assets associated with income producing real estate. Tangible assets include land, buildings, site improvements, tenant improvements and furniture, fixtures and equipment, while intangible assets include the value of in-place leases, lease origination costs (leasing commissions and tenant improvements), legal and marketing costs and leasehold assets and liabilities (above or below market leases), among others. The Company uses independent, third party consultants to assist management with its ASC 805 evaluations. The Company determines fair value based on accepted valuation methodologies including the cost, market, and income capitalization approaches. The purchase price is allocated to the tangible and intangible assets identified in the evaluation. The Company records depreciation on buildings and improvements utilizing the straight-line method over the estimated useful life of the asset, generally 5 to 42 years. The Company reviews depreciable lives of investment properties periodically and makes adjustments to reflect a shorter economic life, when necessary. Tenant allowances, tenant inducements and tenant improvements are amortized utilizing the straight-line method over the term of the related lease. Amounts allocated to buildings are depreciated over the estimated remaining life of the acquired building or related improvements. Acquisition and closing costs are capitalized as part of each tangible asset on a pro rata basis. Improvements and major repairs and maintenance are capitalized when the repair and maintenance substantially extend the useful life, increases capacity or improves the efficiency of the asset. All other repair and maintenance costs are expensed as incurred. The Company reviews investment properties for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of investment properties may not be recoverable, but at least annually. These circumstances include, but are not limited to, declines in the property’s cash flows, occupancy and fair market value. The Company measures any impairment of investment property when the estimated undiscounted cash flows plus its residual value, is less than the carrying value of the property. To the extent impairment has occurred, the Company charges to income the excess of the carrying value of the property over its estimated fair value. The Company estimates fair value using unobservable data such as projected future operating income, estimated capitalization rates, or multiples, leasing prospects and local market information. The Company may decide to sell properties that are held for use and the sale prices of these properties may differ from their carrying values. The Company did not record any impairment adjustments to its investment properties resulting from events or changes in circumstances during the year ended December 31, 2021. Other than the tenant-specific loss on impairment described below, the Company did not record any impairment adjustments to its investment properties resulting from events or changes in circumstances during the year ended December 31, 2020, that would result in the projected value being below the carrying value of the Company’s properties. During June 2020 a tenant in the Company’s Franklin Square Property notified the Company that it was abandoning its leased premises and defaulting on its lease. The Company determined that the carrying value of certain tangible and intangible assets and liabilities associated with this lease that (i) were recorded as part of the purchase of the Franklin Square Property and (ii) were related to this lease and which were recorded during the Company’s ownership of the Franklin Square Property, should be written off. As a result, the Company recorded a loss on impairment of $223,097 for the year ended December 31, 2020, as follows: Loss on impairment – capitalized tenant inducements $ 89,500 Loss on impairment – capitalized tenant improvements arising from acquisition cost allocation 81,860 Loss on impairment – intangible assets – leasing commissions 18,606 Loss on impairment – intangible assets – legal and marketing costs 6,281 Loss on impairment – intangible assets – leases in place 67,065 Gain on impairment – intangible liabilities – below market leases (40,215) Loss on impairment, net $ 223,097 No such tenant-related loss on impairment was recorded during the year ended December 31, 2021. Assets Held for Sale The Company may decide to sell properties that are held as investment properties. The Company records these properties, and any associated mortgages payable, as held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year. Properties classified as held for sale are reported at the lower of their carrying value or their fair value, less estimated costs to sell. When the carrying value exceeds the fair value, less estimated costs to sell, an impairment charge is recognized. The Company determines fair value based on the three-level valuation hierarchy for fair value measurement. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active; and inputs other than quoted prices. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of December 31, 2020, the Company had committed to a plan to sell the Hampton Inn Property. The Company’s plan was for the sale of an asset group that included the land, site improvements, building, building improvements and furniture, fixtures and equipment associated with the Hampton Inn Property. As of December 31, 2020, the Company determined that the carrying value of the Hampton Inn Property exceeded its fair value, less estimated costs to sell, and recorded impairment of assets held for sale of $3,494,058 on its consolidated statement of operations during the year ended December 31, 2020. There was no such impairment recorded during the year ended December 31, 2021. The impairment of assets held for sale represented the difference between the carrying value of the Hampton Inn Property and its estimated fair value, less estimated closing costs. The Company based its estimate of the fair value of the Hampton Inn Property on the actual contract sale price, less estimated closing costs, a level 2 input. The fair value measurement date was as of December 31, 2020. On August 31, 2021, the Company closed on the sale of the Hampton Inn Property (see Note 3, below). During February 2021, the Company committed to a plan to sell the Clemson Best Western Hotel Property. The Company’s plan is for the sale of an asset group that includes the land, site improvements, building, building improvements and furniture, fixtures and equipment associated with the Clemson Best Western Property. The Company believes that the fair value, less estimated costs to sell, exceeds the Company’s carrying cost in the property, so the Company has not recorded any impairment of assets held for sale related to the Clemson Best Western Property for the year ended December 31, 2021. See Note 3 for additional details on impairment of assets held for sale as of December 31, 2021 and 2020, respectively. Intangible Assets and Liabilities, net The Company determines, through the ASC 805 evaluation, the above and below market lease intangibles upon acquiring a property. Intangible assets (or liabilities) such as above or below-market leases and in-place lease value are recorded at fair value and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. The Company amortizes amounts allocated to tenant improvements, in-place lease assets and other lease-related intangibles over the remaining life of the underlying leases. The analysis is conducted on a lease-by-lease basis. The Company reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of its intangible assets may not be recoverable, but at least annually. The Company did not record any impairment adjustments to its intangible assets during the year ended December 31, 2021. During June 2020, a tenant in the Company’s Franklin Square Property notified the Company that it was abandoning its leased premises and defaulting on its lease. The Company determined that the book value of the intangible assets and liabilities, net, associated with this lease of $51,737 that were recorded as part of the purchase of the Franklin Square Property should be written off. This amount is included in the loss on impairment reported on the Company’s consolidated statement of operations for the year ended December 31, 2020. (See the table above.) Details of the deferred costs, net of amortization, arising from the Company’s purchases of its retail center properties and flex center properties are as follows: December 31, 2021 2020 Intangible Assets Leasing commissions $ 1,153,736 $ 948,427 Legal and marketing costs 163,019 86,786 Above market leases 360,509 402,895 Net leasehold asset 2,523,128 1,818,254 $ 4,200,392 $ 3,256,362 Intangible Liabilities Below market leases, net $ (1,880,612) $ (1,022,497) Capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. Capitalized below-market lease values are amortized as an increase to rental income over the remaining terms of the respective leases. Adjustments to rental revenue related to the above and below market leases during the years ended December 31, 2021 and 2020, respectively, were as follows: For the year ended December 31, 2021 2020 Amortization of above market leases $ (250,504) $ (221,390) Amortization of below market leases 274,528 215,248 $ 24,024 $ (6,142) Amortization of lease origination costs, leases in place and legal and marketing costs represent a component of depreciation and amortization expense. Amortization related to these intangible assets during the years ended December 31, 2021 and 2020, respectively, were as follows: For the year ended December 31, 2021 2020 Leasing commissions $ (208,650) $ (178,915) Legal and marketing costs (37,441) (29,515) Net leasehold asset (847,474) (679,937) $ (1,093,565) $ (888,367) As of December 31, 2021 and 2020, the Company’s accumulated amortization of lease origination costs, leases in place and legal and marketing costs totaled $2,779,370 and $2,353,103, respectively. Future amortization of above and below market leases, lease origination costs, leases in place, legal and marketing costs and tenant relationships is as follows: 2022 2023 2024 2025 2026 2027-2040 Total Intangible Assets Leasing commissions $ 225,858 $ 180,039 $ 140,415 $ 117,224 $ 83,900 $ 406,300 $ 1,153,736 Legal and marketing costs 55,857 41,363 23,911 14,122 7,091 20,675 163,019 Above market leases 182,585 84,928 36,312 19,224 13,562 23,898 360,509 Net leasehold asset 920,572 458,836 297,023 213,034 133,627 500,036 2,523,128 $ 1,384,872 $ 765,166 $ 497,661 $ 363,604 $ 238,180 $ 950,909 $ 4,200,392 Intangible Liabilities Below market leases, net $ (356,054) $ (260,491) $ (191,865) $ (140,004) $ (107,217) $ (824,981) $ (1,880,612) Conditional Asset Retirement Obligation A conditional asset retirement obligation represents a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement depends on a future event that may or may not be within the Company’s control. Currently, the Company does not have any conditional asset retirement obligations. However, any such obligations identified in the future would result in the Company recording a liability if the fair value of the obligation can be reasonably estimated. Environmental studies conducted at the time the Company acquired its properties did not reveal any material environmental liabilities, and the Company is unaware of any subsequent environmental matters that would have created a material liability. The Company believes that its properties are currently in material compliance with applicable environmental, as well as non-environmental, statutory and regulatory requirements. The Company did not record any conditional asset retirement obligation liabilities during the years ended December 31, 2021 and 2020, respectively. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash and cash equivalents. Cash equivalents are carried at cost, which approximates fair value. Cash equivalents consist primarily of bank operating accounts and money markets. Financial instruments that potentially subject the Company to concentrations of credit risk include its cash and equivalents and its trade accounts receivable. The Company places its cash and cash equivalents and any restricted cash held by the Company on deposit with financial institutions in the United States which are insured by the Federal Deposit Insurance Company (“FDIC”) up to $250,000. The Company’s credit loss in the event of failure of these financial institutions is represented by the difference between the FDIC limit and the total amounts on deposit. Management monitors the financial institutions credit worthiness in conjunction with balances on deposit to minimize risk. As of December 31, 2021, the Company held five cash accounts with an aggregate balance that exceeded the FDIC limit by $2,377,633. As of December 31, 2020, the Company held two cash accounts with balances that exceeded the FDIC limit by an aggregate amount of $1,719,233. Restricted cash represents (i) amounts held by the Company for tenant security deposits, (ii) escrow deposits held by lenders for real estate tax, insurance, and operating reserves, (iii) an escrow for the first year of dividends on the Company’s mandatorily redeemable preferred stock, and (iv) capital reserves held by lenders for investment property capital improvements. Tenant security deposits are restricted cash balances held by the Company to offset potential damages, unpaid rent or other unmet conditions of its tenant leases. As of December 31, 2021 and 2020, the Company reported $222,265 and $109,059, respectively, in security deposits held as restricted cash. Escrow deposits are restricted cash balances held by lenders for real estate taxes, insurance and other operating reserves. As of December 31, 2021 and 2020, the Company reported $1,523,837 and $1,352,723, respectively, in escrow deposits. An escrow of $371,111 for the first year of dividends on the Company’s mandatorily redeemable preferred stock was created at issuance and was held by a financial institution under an escrow agreement by which the funds were restricted for payment of dividends on the Company’s mandatorily redeemable preferred stock for the first 12 months. As of December 31, 2021 and 2020, the balance of the preferred dividend escrow was $0 and $97,632, respectively. (See Note 4 for further discussion of the Company’s mandatorily redeemable preferred stock). Capital reserves are restricted cash balances held by lenders for capital improvements, leasing commissions furniture, fixtures and equipment, and tenant improvements. As of December 31, 2021 and 2020, the Company reported $1,267,470 and $674,520, respectively, in capital property reserves. December 31, Property and Purpose of Reserve 2021 2020 Hampton Inn Property - furniture, fixtures and equipment $ — $ 18,460 Clemson Best Western Property - improvements 50,012 50,009 Clemson Best Western Property - furniture, fixtures and equipment 275,109 149,752 Franklin Square Property - leasing costs 700,000 408,278 Brookfield Center Property - maintenance reserve 92,349 48,021 Greenbrier Business Center - capital reserve 150,000 — Total $ 1,267,470 $ 674,520 Revenue Recognition Retail and Flex Center Property Revenues The Company recognizes minimum rents from its retail center properties and flex center properties on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset being recorded on the consolidated balance sheets. As of December 31, 2021 and 2020, the Company reported $872,322 and $673,728, respectively, in unbilled rent. The Company’s leases generally require the tenant to reimburse the Company for a substantial portion of its expenses incurred in operating, maintaining, repairing, insuring and managing the shopping center and common areas (collectively defined as Common Area Maintenance or “CAM” expenses). The Company includes these reimbursements, along with other revenue derived from late fees and seasonal events, on the consolidated statements of operations under the captions “Retail center property tenant reimbursements” and “Flex center property tenant reimbursements.” This significantly reduces the Company’s exposure to increases in costs and operating expenses resulting from inflation or other outside factors. The Company accrues reimbursements from tenants for recoverable portions of all these expenses as revenue in the period the applicable expenditures are incurred. The Company calculates the tenant’s share of operating costs by multiplying the total amount of the operating costs by a fraction, the numerator of which is the total number of square feet being leased by the tenant, and the denominator of which is the average total square footage of all leasable buildings at the property. The Company also receives payments for these reimbursements from substantially all its tenants on a monthly basis throughout the year. The Company recognizes differences between previously estimated recoveries and the final billed amounts in the year in which the amounts become final. During the years ended December 31, 2021 and 2020, respectively, the Company recognized $113,493 and $14,934, respectively, in retail center and flex center property tenant reimbursement revenues resulting from differences between previously estimated recoveries and the final billed amounts. The Company recognizes lease termination fees in the period that the lease is terminated and collection of the fees is reasonably assured. During the year ended December 31, 2021, the Company received a $200,000 lease termination fee from a tenant in the Company’s Franklin Square Property. The Company recorded this revenue as other income on the Company’s consolidated statements of operation for the year ended December 31, 2021. For the year ended December 31, 2020, no such termination fee revenues were recognized. Upon early lease termination, any unrecovered intangibles and other assets are written off as a loss on impairment. All unrecovered intangibles and other assets associated with the tenant in the Company’s Franklin Square Property which terminated its lease had been fully depreciated or amortized prior to the termination. Accordingly, during the years ended December 31, 2021 and 2020, respectively, no such loss on impairment was recognized. Hotel Property Revenues Hotel revenues (from the Hampton Inn Property and Clemson Best Western Property) are recognized as earned, which is generally defined as the date upon which a guest occupies a room or utilizes the hotel’s services. Revenues from the Company’s occupancy agreement with Clemson University are recognized as earned, which is as rooms are occupied or otherwise reserved for use by the University. The Hampton Inn Property and Clemson Best Western Property are required to collect certain taxes and fees from customers on behalf of government agencies and remit them back to the applicable governmental agencies on a periodic basis. The Hampton Inn Property and Clemson Best Western Property have a legal obligation to act as a collection agent. The Hampton Inn Property and Clemson Best Western Property do not retain these taxes and fees; therefore, they are not included in revenues. The Hampton Inn Property and Clemson Best Western Property record a liability when the amounts are collected and relieves the liability when payments are made to the applicable taxing authority or other appropriate governmental agency. Hotel Property Operating Expenses All personnel of the Hampton Inn Property and Clemson Best Western Property are directly or indirectly employees of Marshall Hotels and Resorts, Inc. (“Marshall”), the Company’s hotel management firm. In addition to fees and services discussed above, the Hampton Inn Property and Clemson Best Western Property reimburse Marshall for all employee related service costs, including payroll salaries and wages, payroll taxes and other employee benefits paid by Marshall on behalf of the respective property. For the Hampton Inn Property, total amounts incurred for payroll salaries and wages, payroll taxes and other employee benefits for the years ended December 31, 2021 (the Company sold the Hampton Inn Property on August 31, 2021) and December 31, 2020, were $622,844 and $642,760, respectively. For the Clemson Best Western Property, total amounts incurred for payroll salaries and wages, payroll taxes and other employee benefits for the years ended December 31, 2021 and 2020, were $468,897 and $463,175, respectively. The amounts are included in hotel property operating expenses in the accompanying consolidated statements of operations. Rent and other receivables Rent and other receivables include tenant receivables related to base rents and tenant reimbursements. Rent and other receivables do not include receivables attributable to recording rents on a straight-line basis, which are included in unbilled rent, discussed above. The Company determines an allowance for the uncollectible portion of accrued rents and accounts receivable based upon customer credit worthiness (including expected recovery of a claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. The Company considers a receivable past due once it becomes delinquent per the terms of the lease. A past due receivable triggers certain events such as notices, fees and other allowable and required actions per the lease. As of December 31, 2021 and 2020, the Company’s allowance for uncollectible rent totaled $13,010 and $4,693, respectively, which are comprised of amounts specifically identified based on management’s review of individual tenants’ outstanding receivables. Management determined that no additional general reserve is considered necessary as of December 31, 2021 and 2020, respectively. Income Taxes Beginning with the Company’s taxable year ended December 31, 2017, the REIT has elected to be taxed as a real estate investment trust for federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code and applicable Treasury regulations relating to REIT qualification. In order to maintain this REIT status, the regulations require the Company to distribute at least 90% of its taxable income to shareholders and meet certain other asset and income tests, as well as other requirements. If the Company fails to qualify as a REIT, it will be subject to tax at regular corporate rates for the years in which it fails to qualify. If the Company loses its REIT status it could not elect to be taxed as a REIT for five years unless the Company’s failure to qualify was due to reasonable cause and certain other conditions were satisfied. During the years ended December 31, 2021 and 2020, respectively, the Company’s Hampton Inn TRS entity generated a tax loss, so no income tax expense was recorded. During the year ended December 31, 2021, the Company’s Clemson Best Western TRS entity generated taxable income. During the year ended December 31, 2020, the Company Clemson Best Western TRS entity generated a taxable loss. The Company believes that the net operating loss carry forward from the year ended December 31, 2020, and prior years, will offset the taxable income for the year ended December 31, 2021, so no income tax expense was recorded. Management has evaluated the effect of the guidance provided by GAAP on Accounting for Uncertainty of Income Taxes Use of Estimates The Company has made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and revenues and expenses during the reported period. The Company’s actual results could differ from these estimates. Noncontrolling Interests There are three elements of noncontrolling interests in the capital structure of the Company. The ownership interests not held by the REIT are considered noncontrolling interests. Accordingly, noncontrolling interests have been reported in equity on the consolidated balance sheets but separate from the Company’s equity. On the consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. The Company’s consolidated statements of changes in stockholders’ equity includes beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity. The first noncontrolling interest is in the Hampton Inn Property. In 2017, the noncontrolling owner of the Hampton Inn Property provided $2.3 million as part of the acquisition of the Hampton Inn Property for a 36 percent tenancy in common ownership interest. The Company acquired a 64 percent tenancy in common interest through its subsidiaries. Effective on January 1, 2020, the Company entered into a transaction with the noncontrolling owner of the Hampton Inn Property by which the noncontrolling owner exchanged (i) 7.55 percent of its tenant in common interest in the Hampton Inn Property for the settlement of $867,000 in advances made by the Company to the Hampton Inn Property (of which $312,120, or 36 percent, were made on behalf of the noncontrolling owner); and (ii) 3.45 percent of its tenant in common interest in the Hampton Inn Property for 93,850 units of the Operating Partnership. As a result of this transaction, effective on January 1, 2020, the Company’s tenant-in-common interest in the Hampton Inn Property increased from 64 percent to 75 percent, and the noncontrolling owner’s tenant-in-common interest decreased from 36 percent to 25 percent. Effective on November 9, 2020, the noncontrolling owner exchanged 3 percent of its tenant in common interest in the Hampton Inn Property for the settlement of $1,021,960 in advances made by the Company to the Hampton Inn Property (of which $255,490, or 25 percent, were made on behalf of the noncontrolling owner). As a result of this transaction, the Company’s tenant-in-common interest in the Hampton Inn Property increased from 75 percent to 78 percent, and the noncontrolling owner’s tenant-in-common interest decreased from 25 percent to 22 percent. During the year ended December 31, 2021, as part of the close out of its ownership of the Hampton Inn Property, the Company reallocated $675,990 of accumulated deficit from the noncontrolling interest’s accumulated deficit to the Company’s accumulated deficit. These transactions did not have any impact on the Company’s total assets, liabilities or shareholder’s equity or total equity as of December 31, 2021 or December 31, 2020. The Hampton Inn Property’s net income (loss) is allocated to the noncontrolling ownership interest based on its percent ownership. During the year ended December 31, 2021, 22 percent of the Hampton Inn’s net income of $66,595, or $14,651, was allocated to the noncontrolling partnership interest. During the year ended December 31, 2020, a weighted average of 22.68 percent of the Hampton Inn’s net loss of $4,990,531, or $1,131,765, was allocated to the noncontrolling partnership interest. The second noncontrolling interest is in the Hanover Square Property in which the Company owns an 84 percent tenancy in common interest through its subsidiary and an outside party owns a 16 percent tenancy in common interest. The Hanover Square Property’s net loss is allocated to the noncontrolling ownership interest based on its 16 percent ownership. During the year ended December 31, 2021, 16 percent of the Hanover Square Property’s net loss of $54,888, or $8,781, was allocated to the noncontrolling ownership interest. During the year ended December 31, 2020, 16 percent of the Hanover Square Property’s net loss of $144,795, or $23,167 was allocated to the noncontrolling ownership interest. The third noncontrolling interest is in the Parkway Property in which the Company owns an 82 percent tenancy in common interest through its subsidiary and an outside party owns an 18 percent tenancy in common interest. The Parkway Property’s net loss is allocated to the noncontrolling ownership interest based on its 18 percent ownership. During the year ended December 31, 2021, 18 percent of the Parkway Property’s net loss of $21,062 or $3,791, was allocated to the noncontrolling ownership interest. Since the Company acquired the Parkway Property during the year ended December 31, 2021, no such noncontrolling interest allocation was made during the year ended December 31, 2020. The fourth noncontrolling ownership interest are the units in the Operating Partnership that are not held by the REIT. In 2017, 125,000 Operating Partnership units were issued to members of the selling LLC which owned the Hampton Inn Property who elected to participate in a 721 exchange, which allows the exchange of interests in real property for shares in a real estate investment trust. These members of the selling LLC invested $1,175,000 in the Operating Partnership in exchange for 125,000 Operating Partnership units. Additionally, as discussed above, effective on January 1, 2020, 93,850 Operating Partnership units were issued in exchange for approximately 3.45 percent of the noncontrolling owner’s tenant in common interest in the Hampton Inn Property. On August 31, 2020, a unitholder converted 5,319 Operating Partnership units into shares of Common Stock. As of December 31, 2021, there were 213,531 Operating Partnership units outstanding. The Operating Partnership units not held by the REIT represent 1.31 percent and 4.26 percent of the outstanding Operating Partnership units as of December 31, 2021 and 2020, respectively. The noncontrolling interest percentage is calculated at any point in time by dividing the number of units not owned by the Company by the total number of units outstanding. The noncontrolling interest ownership percentage will change as additional common or preferred shares are issued by the REIT, or additional Operating Partnerships units are issued or as units are exchanged for the Company’s $0.01 par value per share Common Stock. During periods when the Operating Partnership’s noncontrolling interest changes, the noncontrolling ownership interest is calculated based on the weighted average Operating Partnership noncontrolling ownership interest during that period.The Operating Partnership’s net loss is allocated to the noncontrolling unit holders based on their ownership interest. During the year ended December 31, 2021, a weighted average of 1.82 percent of the Operating Partnership’s net income of $214,333, or $3,903, was allocated to the noncontrolling unit holders. During the year ended December |
Investment Properties
Investment Properties | 12 Months Ended |
Dec. 31, 2021 | |
Investment Properties | |
Investment Properties | 3. Investment Properties Investment properties consist of the following: December 31, 2021 2020 (1) Land $ 14,142,555 $ 12,281,693 Site improvements 4,431,338 3,751,212 Buildings and improvements (2) 57,322,242 45,137,682 Furniture, fixtures and equipment — 825,147 Investment properties at cost (3) 75,896,135 61,995,734 Less accumulated depreciation 6,488,220 4,939,872 Investment properties, net $ 69,407,915 $ 57,055,862 (1) As of December 31, 2020, the Clemson Best Western Property is recorded as an investment property. As of December 31, 2021, the Clemson Best Western Property is recorded as an asset held for sale. Please see the note on “assets held for sale”, below. (2) Includes tenant improvements (both those acquired at the acquisition and those constructed after the acquisition), tenant inducements, capitalized leasing commissions and other capital costs incurred post-acquisition. (3) Excludes intangible assets and liabilities (see Note 2, above, for a discussion of the Company’s accounting treatment of intangible assets), escrow deposits and property reserves. The Company’s depreciation expense on investment properties was $2,415,139 and $3,067,556 for the years ended December 31, 2021, and 2020, respectively. Capitalized tenant improvements The Company carries two categories of capitalized tenant improvements on its consolidated balance sheets, both of which are recorded under investment properties, net on the Company’s consolidated balance sheets. The first category is the allocation of acquisition costs to tenant improvements that is recorded on the Company’s consolidated balance sheet as of the date of the Company’s acquisition of the investment property. The second category are tenant improvement costs incurred and paid by the Company subsequent to the acquisition of the investment property. Both are recorded as a component of investment properties on the Company’s consolidated balance sheets. Depreciation expense on both categories of tenant improvements is recorded as a component of depreciation expense on the Company’s consolidated statement of operations. The Company generally records depreciation of capitalized tenant improvements on a straight-line basis over the terms of the related leases. Details of these deferred costs, net of depreciation are as follows: December 31, 2021 2020 Capitalized tenant improvements – acquisition cost allocation, net $ 1,840,612 $ 1,155,505 Capitalized tenant improvements incurred subsequent to acquisition, net 257,340 179,919 During the years ended December 31, 2021 and 2020, the Company recorded $143,079 and $60,000, respectively, in capitalized tenant improvements. During June 2020, a tenant in the Company’s Franklin Square Property notified the Company that it was abandoning its leased premises and defaulting on its lease. The Company determined that the capitalized tenant improvement associated with this lease that was recorded as part of the purchase of the Franklin Square Property and carried on the Company’s consolidated balance sheets related to this lease of $81,860 should be written off. This amount is included in the loss on impairment reported on the Company’s consolidated statement of operations for the year ended December 31, 2020. No such loss on impairment was recorded during the year ended December 31, 2021. Depreciation of capitalized tenant improvements incurred subsequent to acquisition was $65,658 and $45,843 for the years ended December 31, 2021 and 2020, respectively. Depreciation of capitalized tenant improvements arising from the acquisition cost allocation was $371,714 and $267,118 for the years ended December 31, 2021 and 2020, respectively. Capitalized leasing commissions The Company carries two categories of capitalized leasing commissions on its consolidated balance sheets. The first category is the allocation of acquisition costs to leasing commissions that is recorded as an intangible asset (see Note 2, above, for a discussion of the Company’s accounting treatment for intangible assets) on the Company’s consolidated balance sheet as of the date of the Company’s acquisition of the investment property. The second category is leasing commissions incurred and paid by the Company subsequent to the acquisition of the investment property. These costs are carried on the Company’s consolidated balance sheets under investment properties. The Company generally records depreciation of capitalized leasing commissions on a straight-line basis over the terms of the related leases. Details of these deferred costs, net of depreciation are as follows: December 31, 2021 2020 Capitalized leasing commissions, net $ 356,327 $ 346,437 During the years ended December 31, 2021 and 2020, the Company recorded $75,304 and $56,746, respectively in capitalized leasing commissions. Depreciation of capitalized leasing commissions was $65,414 and $49,578 for the years ended December 31, 2021 and 2020, respectively. Assets held for sale The Company records properties as assets held for sale, and any associated mortgages payable, net, as mortgages payable, net, associated with assets held for sale, on the Company’s consolidated balance sheets when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year. During February 2021, the Company committed to a plan to sell an asset group associated with the Clemson Best Western Hotel Property that includes the land, site improvements, building, building improvements and furniture, fixtures and equipment. As a result, as of March 31, 2021, the Company reclassified these assets, and the related mortgage payable, net, for the Clemson Best Western Property as assets held for sale and liabilities associated with assets held for sale, respectively. The Company expects that it will retain cash and restricted cash and will be responsible for the extinguishment of any accounts payable and other liabilities associated with the Clemson Best Western Property. As of December 31, 2021, management believes that its plans to sell the Clemson Best Western Hotel Property continue to meet the criteria for the asset to be recorded an asset held for sale and, as of December 31, 2021, the assets held for sale on the Company’s consolidated balance sheets included certain assets associated with the Clemson Best Western Property. The Company believes that the fair value, less estimated costs to sell, exceeds the Company’s carrying cost, so the Company has not recorded any impairment of assets held for sale related to the Clemson Best Western Property for the year ended December 31, 2021 or 2020. As of December 31, 2020, the Company committed to a plan to sell an asset group associated with the Hampton Inn Property that includes the land, site improvements, building, building improvements and furniture, fixtures and equipment. As a result, as of December 31, 2020, the Company reclassified these assets, and the related mortgage payable, net, for the Hampton Inn Property as assets held for sale and liabilities associated with assets held for sale, respectively. The Company expected that it would retain cash and restricted cash and would be responsible for the extinguishment of any accounts payable and other liabilities associated with the Hampton Inn Property. Accordingly, these amounts were excluded from the assets and related liabilities that had been reclassified as assets held for sale and liabilities associated with assets held for sale as of December 31, 2020. For the year ended December 31, 2020, the Company recorded an impairment charge of $3,494,058 on assets held for sale. This impairment charge resulted from reducing the carrying value of the Hampton Inn Property for the amounts that exceeded the property’s estimated fair value less estimated selling costs. See Note 2, above. The Company closed on the sale of the Hampton Inn Property on August 31, 2021. (See “Sale of investment property”, below.) As of December 31, 2021 and 2020, assets held for sale and liabilities associated with assets held for sale consisted of the following: December 31, 2021 2020 Investment properties, net $ 9,846,208 $ 12,410,250 Total assets held for sale $ 9,846,208 $ 12,410,250 December 31, 2021 2020 Mortgages payable, net $ 7,615,368 $ 10,352,000 Total liabilities associated with assets held for sale $ 7,615,368 $ 10,352,000 Sale of investment property On August 31, 2021, the Company sold the Hampton Inn Property to an unrelated third party for a sale price of $12.9 million, resulting in a gain on sale of investment properties of $124,641 reported on the Company’s consolidated statement of operations for the year ended December 31, 2021. The Company did not report any gain or loss on the sale of investment properties for the year ended December 31, 2020. The Company reports properties that are either previously disposed of or currently held for sale in continuing operations in the Company’s consolidated statements of operations if the disposition, or anticipated disposition, of the assets does not represent a shift in the Company’s investment strategy. The Company’s sale of the Hampton Inn Property and plan to sell the asset group associated with the Clemson Best Western Hotel Property do not constitute a change in the Company’s investment strategy, which continues to include limited service hotels as a targeted asset class. Operating results of the Hampton Inn Property, which are included in continuing operations, are as follows: Year ended December 31, 2021 2020 Hotel property room revenues $ 1,912,809 $ 1,697,432 Hotel property other revenues 28,274 61,250 Total Revenue 1,941,083 1,758,682 Hotel property operating expenses 1,701,451 1,755,684 Depreciation and amortization — 677,560 Total Operating Expenses 1,701,451 2,433,244 Gain on disposal of investment properties 124,641 — Operating Income (Loss) 364,273 (674,562) Interest expense 475,844 811,214 Net Loss from Operations (111,571) (1,485,776) Other income (loss) 178,166 (10,697) Net Income (Loss) 66,595 (1,496,473) Net income (loss) attributable to Hampton Inn Property noncontrolling interests 14,651 (1,131,765) Net Income (Loss) Attributable to Medalist Common Shareholders $ 51,944 $ (364,708) 2021 Property Acquisitions The Lancer Center Property On May 14, 2021, the Company completed its acquisition of the Lancer Center Property, a 178,626 square foot retail property located in Lancaster, South Carolina, through a wholly owned subsidiary. The Lancer Center Property, built in 1987, was 100 percent leased as of December 31, 2021 and is anchored by KJ’s Market, Big Lots, Badcock Furniture, and Harbor Freight. The purchase price for the Lancer Center Property was $10,100,000, less a $200,000 credit to the Company for major repairs, paid through a combination of cash provided by the Company and the incurrence of new mortgage debt. The Company’s total investment, including $143,130 of loan issuance costs, was $10,205,385. The Company incurred $305,385 of acquisition and closing costs which were capitalized and added to the tangible assets acquired. The Greenbrier Business Center Property On August 27, 2021, the Company completed its acquisition of the Greenbrier Business Center Property, an 89,290 square foot mixed-use industrial/office property, through a wholly owned subsidiary. The Greenbrier Business Center Property was previously owned by Medalist Fund II-B, LLC, a Virginia limited liability company, which is also managed by the Company’s external manager. This transaction was completed at arms-length. The Greenbrier Business Center Property, built in 1987, was 86.8 percent leased as of December 31, 2021. Major tenants include Bridge Church, Superior Staffing, Consolidated Electrical Distributors and Mid-Atlantic Office Technologies. The purchase price for the Greenbrier Business Center Property was $7,250,000, paid through a combination of cash provided by the Company and the assumption of mortgage debt. The Company’s total investment, including $13,400 of loan issuance costs, was $7,578,762. The Company incurred $178,763 of acquisition and closing costs which were capitalized and added to the tangible assets acquired. The Parkway Property On November 1, 2021, the Company completed its acquisition of an undivided 82% Lancer Greenbrier Center Business Center Parkway Property Property Property Total Fair value of assets acquired Investment property (a) $ 9,902,876 $ 6,896,803 $ 7,277,036 $ 24,076,715 Lease intangibles and other assets (b) 1,023,753 583,940 472,288 2,079,981 Restricted cash acquired (c) — 150,000 — 150,000 Above market leases (b) 157,438 48,186 2,494 208,118 Below market leases (b) (878,682) (100,167) (153,794) (1,132,643) Preliminary fair value of net assets acquired (d) $ 10,205,385 $ 7,578,762 $ 7,598,024 $ 25,382,171 Purchase consideration Consideration paid with cash (e) $ 3,783,515 $ 3,097,162 $ 2,138,795 $ 9,019,472 Consideration paid by noncontrolling owner (f) — — 469,492 469,492 Consideration paid with new mortgage debt, net (g) 6,421,870 — 4,989,737 11,411,607 Consideration paid with assumed mortgage debt, net (h) — 4,481,600 — 4,481,600 Preliminary total consideration (i) $ 10,205,385 $ 7,578,762 $ 7,598,024 $ 25,382,171 a. Represents the fair value of the investment property acquired which includes land, buildings, site improvements, tenant improvements and furniture, fixtures and equipment. The fair value was determined using the market approach, the cost approach, the income approach or a combination thereof. Closing and acquisition costs were allocated and added to the fair value of the tangible assets acquired. b. Represents the fair value of lease intangibles and other assets. Lease intangibles include leasing commissions, leases in place, above market leases, below market leases and legal and marketing costs associated with replacing existing leases. c. Represents an operating reserve funded by the Company at closing. d. Represents the total fair value of assets and liabilities acquired at closing. e. Represents cash paid at closing and cash paid for acquisition (including intangible assets), and closing costs paid at closing or directly by the Company outside of closing. f. Represents cash paid at closing by the noncontrolling owner. In addition to cash paid at closing, the noncontrolling owner provided $34,508 directly to the operating entity for working capital purposes. g. Issuance of new mortgage debt to fund the purchase of the Lancer Center Property , net of capitalized loan issuance costs. See Note 5, below. h. Assumption of mortgage debt related to the purchase of the Greenbrier Business Center Property. See Note 5, below. i. Represents the consideration paid for the fair value of the assets and liabilities acquired. |
Mandatorily Redeemable Preferre
Mandatorily Redeemable Preferred Stock | 12 Months Ended |
Dec. 31, 2021 | |
Mandatorily Redeemable Preferred Stock | |
Mandatorily Redeemable Preferred Stock | 4. Mandatorily Redeemable Preferred Stock On February 19, 2020, the Company issued and sold 200,000 shares of 8.0% Series A cumulative redeemable preferred stock at $23.00 per share, resulting in gross proceeds of $4,600,000. Net proceeds from the issuance were $3,860,882, which includes the impact of the underwriter’s discounts, selling commissions and legal, accounting and other professional fees, and is presented on the Company’s consolidated balance sheets as mandatorily redeemable preferred stock. The mandatorily redeemable preferred stock has an aggregate liquidation preference of $5 million, plus any accrued and unpaid dividends thereon. The mandatorily redeemable preferred stock is senior to the Company’s common stock and any class or series of capital stock expressly designated as ranking junior to the mandatorily redeemable preferred stock as to distribution rights and rights upon liquidation, dissolution or winding up (“Junior Stock”). The mandatorily redeemable preferred stock is on a parity with any class or series of the Company’s capital stock expressly designated as ranking on a parity with the mandatorily redeemable preferred stock as to distribution rights and rights upon liquidation, dissolution or winding up (“Parity Stock”). If outstanding on February 19, 2025, the mandatorily redeemable preferred stock must be redeemed by the Company on that date, the fifth anniversary of the date of issuance. Beginning on February 19, 2022, the second anniversary of the issuance, the Company may redeem the outstanding mandatorily redeemable preferred stock for an amount equal to its aggregate liquidation preference, plus any accrued but unpaid dividends. The holders of the mandatorily redeemable preferred stock may also require the Company to redeem the stock upon a change of control of the Company for an amount equal to its aggregate liquidation preference plus any accrued and unpaid dividends thereon. Holders of the mandatorily redeemable preferred stock generally have no voting rights. However, if the Company does not pay dividends on the mandatorily redeemable preferred stock for six consecutive quarterly periods, the holders of that stock, voting together as a single class with the holders of any outstanding Parity Stock having similar voting rights, will be entitled to vote for the election of two additional directors to serve on the Company’s Board of Directors until the Company pays all dividends owed on the mandatorily redeemable preferred stock. The affirmative vote of the holders of at least two-thirds of the outstanding shares of mandatorily redeemable preferred stock, voting together as a single class with the holders of any other class or series of the Company’s preferred stock upon which like voting rights have been conferred and are exercisable, is required for the Company to authorize, create or increase the number of shares of any class or series of capital stock expressly designated as ranking senior to the mandatorily redeemable preferred stock as to distribution rights and rights upon the Company’s liquidation, dissolution or winding up. In addition, the affirmative vote of at least two-thirds of the outstanding shares of mandatorily redeemable preferred stock (voting as a separate class) is required to amend the Company’s charter (including the articles supplementary designating the mandatorily redeemable preferred stock) in a manner that materially and adversely affects the rights of the holders of mandatorily redeemable preferred stock. Among other things, the Company may, without any vote of the holders of mandatorily redeemable preferred stock, issue additional shares of mandatorily redeemable preferred stock and may authorize and issue additional shares of any class or series of any Junior Stock or Parity Stock. The Company has classified the mandatorily redeemable preferred stock as a liability in accordance with ASC Topic No. 480, “ Distinguishing Liabilities from Equity For all periods the mandatorily redeemable preferred stock has been outstanding, the Company has paid a cash dividend on the stock equal to 8 percent per annum, paid quarterly, as follows: Amount Payment Date Record Date per share For the period April 27, 2020 April 24, 2020 $ 0.37 February 19, 2020 - April 27, 2020 July 24, 2020 July 22, 2020 0.50 April 28, 2020 - July 24, 2020 October 26, 2020 October 23, 2020 0.50 July 25, 2020 - October 26, 2020 February 1, 2021 January 29, 2021 0.50 October 27, 2020 - February 1, 2021 April 30, 2021 April 26, 2021 0.50 February 2, 2021 – April 30, 2021 July 26, 2021 July 12, 2021 0.50 May 1, 2021 - July 26, 2021 October 27, 2021 October 25, 2021 0.50 July 27, 2021 – October 26, 2021 January 20, 2022 January 13, 2022 0.50 October 27, 2021 – January 19, 2022 As of December 31, 2021 and 2020, the Company recorded $70,004 and $70,004, respectively, in accrued but unpaid dividends on the mandatorily redeemable preferred stock. This amount is reported in accounts payable and accrued liabilities on the Company’s consolidated balance sheets. The mandatorily redeemable preferred stock was issued at $23.00 per share, a $2.00 per share discount. The total discount of $400,000 is being amortized over the five-year life of the shares using the effective interest method. Additionally, the Company incurred $739,118 in legal, accounting, other professional fees and underwriting discounts related to this offering. These costs were recorded as deferred financing costs on the accompanying consolidated balance sheets as a direct deduction from the carrying amount of the mandatorily redeemable preferred stock liability and are being amortized using the effective interest method over the term of the agreement. Amortization of the discount and deferred financing costs related to the mandatorily redeemable preferred stock totaling $204,383 and $162,375 were included in interest expense for the years ended December 31, 2021, and 2020 respectively, in the accompanying consolidated statements of operations. Accumulated amortization of the discount and deferred financing costs was $366,758 and $162,375 as of December 31, 2021 and 2020, respectively. |
Loans Payable
Loans Payable | 12 Months Ended |
Dec. 31, 2021 | |
Loans Payable | |
Loans Payable | 5. Loans Payable Mortgages Payable The Company’s mortgages payables, net consists of the following: Monthly Interest December 31, Property Payment Rate Maturity 2021 2020 Franklin Square (a) Interest only 3.808 % December 2031 $ 13,250,000 $ 14,275,000 Hanover Square (b) $ 56,882 4.25 % December 2027 10,134,667 10,380,791 Ashley Plaza (c) $ 52,795 3.75 % September 2029 11,127,111 11,349,518 Clemson Best Western (d) Interest only Variable October 2022 — 7,750,000 Brookfield Center (e) $ 22,876 3.90 % November 2029 4,758,344 4,842,887 Lancer Center (f) $ 34,667 4.00 % March 2026 6,488,034 — Greenbrier Business Center (g) Interest only 4.00 % July 2026 4,495,000 — Parkway Center (h) Variable Variable October 2026 5,090,210 — Unamortized issuance costs, net (825,544) (503,842) Total mortgages payable, net $ 54,517,822 $ 48,094,354 (a) The original mortgage loan for the Franklin Square Property in the amount of $14,275,000 matured on October 6, 2021. Effective on October 6, 2021, the Company entered into a forbearance agreement with the current lender extending the maturity date for thirty days with a right to extend the maturity date for an additional thirty days. On November 8, 2021, the Company closed on a new loan in the principal amount of $13,250,000 with a ten-year term and a maturity date of December 6, 2031. In addition to the funds from the new loan, the Company used $2,242,273 in cash on hand for loan issuance costs (totaling $283,721 ), to fund escrows and to repay the remaining balance of the original mortgage loan. The Company has guaranteed the payment and performance of the obligations of the new mortgage loan. The new mortgage loan bears interest at a fixed rate of 3.808 percent and is interest only until January 6, 2025, at which time the monthly payment will become $61,800 , which includes interest and principal based on a 30 year amortization schedule. The Company accounted for this refinancing transaction in accordance with debt extinguishment accounting in accordance with ASC 470. The new mortgage includes covenants for the Company to maintain a net worth of $13,250,000 , excluding the assets and liabilities associated with the Franklin Square Property and for the Company to maintain liquid assets of no less than $1,000,000 . As of December 31, 2021, the Company believes that it is compliant with these covenants. (b) On May 8, 2020, the Company entered into a refinancing transaction with the mortgage lender for the Hanover Square Property which increased the mortgage amount and reduced the interest rate. Under this transaction, the principal amount of the loan was increased to $10,500,000 and the interest rate reduced to a fixed rate of 4.25 percent until January 1, 2023, when the interest rate will adjust to a new fixed rate which will be determined by adding 3.00 percentage points to the daily average yield on United States Treasury securities adjusted to a constant maturity of five years , as made available by the Federal Reserve Board, with a minimum of 4.25 percent. The fixed monthly payment, which includes principal and interest, increased to $56,882 . The Company accounted for this transaction as a loan modification in accordance with ASC 470. The mortgage loan agreement for the Hanover Square property includes covenants to (i) maintain a Debt Service Coverage Ratio (“DSCR”) in excess of 1.35 and (ii) maintain a loan-to-value of real estate ratio of 75 percent. As of December 31, 2021 and 2020, respectively, the Company believes that it is compliant with these covenants. (c) The mortgage loan for the Ashley Plaza Property bears interest at a fixed rate of 3.75 percent and was interest only for the first twelve months. Beginning on October 1, 2020, the monthly payment became $52,795 for the remaining term of the loan, which includes interest at the fixed rate, and principal, based on a thirty year amortization schedule. (d) As of March 31, 2021, the Company reclassified the mortgage loan for the Clemson Best Western Property to mortgages payable, net, associated with assets held for sale (see below). (e) The mortgage loan for the Brookfield Property bears interest at a fixed rate of 3.90 percent and is interest only for the first twelve months. Beginning on November 1, 2020, the monthly payment became $22,876 for the remaining term of the loan, which includes interest at the fixed rate, and principal, based on a thirty year amortization schedule. (f) The mortgage loan for the Lancer Center Property bears interest at a fixed rate of 4.00 percent. The monthly payment is $34,667 which includes interest at the fixed rate and principal, based on a twenty-five year amortization schedule. The Company has provided a guaranty of the payment of and performance under the terms of the Lancer Center Property mortgage. (g) The Company assumed the mortgage loan for the Greenbrier Business Center Property from the seller. The mortgage loan bears interest at a fixed rate of 4.00 percent and is interest only until August 1, 2022, at which time the monthly payment will become $23,873 , which includes interest at the fixed rate, and principal, based on a twenty-five year amortization schedule. The Greenbrier Business Center Property mortgage includes covenants to maintain a debt service coverage ratio above 1.35 to 1.00 and maintain an occupancy rate of at least 80 percent. As of December 31, 2021, the Company believes that it is compliant with these covenants. (h) The mortgage loan for the Parkway Property bears interest at a variable rate based on LIBOR with a minimum rate of 2.25 percent. The interest rate payable is the ICE LIBOR rate plus 225 basis points . As of December 31, 2021, the rate in effect for the Parkway Property mortgage was 2.3493 percent. The monthly payment, which varies based on the interest rate in effect each month, includes interest at the variable rate, and principal based on a 30 year amortization schedule. Mortgages payable, net, associated with assets held for sale The Company’s mortgages payables, net, associated with assets held for sale, consists of the following: Monthly Interest December 31, Property Payment Rate Maturity 2021 2020 Hampton Inn (a) Interest only Variable May 2022 $ — $ 10,400,000 Clemson Best Western (b) Interest only Variable October 2022 7,750,000 — Unamortized issuance costs, net (134,632) (48,000) Total mortgages payable, net, associated with assets held for sale $ 7,615,368 $ 10,352,000 (a) As of December 31, 2020, the Company reclassified the mortgage loan for the Hampton Inn Property to mortgages payable, net, associated with assets held for sale. On August 31, 2021, the Company repaid the loan as part of the sale of the Hampton Inn Property. The mortgage loan for the Hampton Inn Property bore interest at a variable rate based on LIBOR with a minimum rate of 6.50 percent. The interest rate payable is the USD LIBOR one-month rate plus 6.25 percent. As of August 31, 2021 (the date of the mortgage loan repayment) and December 31, 2020, the rate in effect for the Hampton Inn Property mortgage was 6.50 percent and 6.50 percent, respectively. (b) As of March 31, 2021, the Company reclassified the mortgage loan for the Clemson Best Western Property to mortgages payable, net, associated with assets held for sale. The mortgage loan for the Clemson Best Western Property bears interest at a variable rate based on LIBOR with a minimum rate of 7.15 percent. The interest rate payable is the USD LIBOR one-month rate plus 4.9 percent. As of December 31, 2021 and 2020, respectively, the rate in effect for the Clemson Best Western Property mortgage was 7.15 percent. The mortgage payable on the Clemson Best Western Property matures on October 6, 2022. The Company has an option to extend the term of the mortgage by one year, until October 6, 2023, under certain conditions. If the Company has not been successful in its efforts to sell the Clemson Best Western Property by the loan maturity date, the Company plans to exercise the option to extend the term of the mortgage. Convertible Debentures On October 27, 2020, the Company entered into a definitive agreement with a financing entity to issue and sell convertible debentures in an aggregate principal amount of up to $5 million pursuant to a private offering exempt from registration under the Securities Act of 1933, as amended. The debentures were issued at a 5 percent discount to the principal amount, accrue interest at a rate of 5 percent per annum (payable at conversion or maturity), and were closed in three separate tranches as follows: (i) convertible debenture of $1.5 million issued and sold on October 27, 2020 upon the signing of the definitive agreement, (ii) convertible debenture of $2.0 million issued and sold on December 22, 2020 upon the filing of a registration statement with the U.S. Securities and Exchange Commission (“SEC”) relating to the shares of common stock that may be issued upon the conversion of the convertible debentures, and (iii) convertible debenture of $1.5 million issued and sold on January 5, 2021, the date the registration statement was declared effective by the SEC. The second and third closings of the convertible debentures were subject to the Company successfully obtaining approval from its common stockholders for the issuance of shares of common stock that may be issued upon the conversion of the convertible debentures. Net proceeds from the issuance and sale of the convertible debentures totaled $4,231,483. Debt Principal Issuance Net Cash Tranche Closing Date Amount Discount Costs – Cash Proceeds Tranche 1 October 27, 2020 $ 1,500,000 $ (75,000) $ (155,555) $ 1,269,445 Tranche 2 December 22, 2020 2,000,000 (100,000) (207,407) 1,692,593 Tranche 3 January 5, 2021 1,500,000 (75,000) (155,555) 1,269,445 Total $ 5,000,000 $ 250,000 $ 518,517 $ 4,231,483 The 5 percent issue discount totaled $250,000 and was amortized over the one-year term of the debentures using the effective interest method. The Company also paid a total of $518,517 in issuance costs, including legal, accounting, other professional fees, and underwriting discounts. In addition to the closing costs paid in cash, the Company paid $123,000 in debt issuance costs in common shares of the Company. These issuance costs were recorded as deferred debt issuance costs on the accompanying consolidated balance sheets as a direct deduction from the carrying amount of the convertible debentures and were amortized over the one-year term of the debentures using the effective interest method. Based on the terms and relevant conversion details, the debt component and embedded conversion option of the debentures are not bifurcated for accounting purposes under ASC 815, Derivative Instruments and Hedging Activities Debt Each tranche of the convertible debentures had a maturity date one year from its closing date. At its option, the holder at any time may elect to convert any portion of the principal and accrued interest into shares of the Company’s common stock. Conversions into common stock occur at the lower of (1) a fixed conversion price of $2.47, or (2) a variable conversion price equal to 88 percent of the volume-weighted average price of the Company’s common shares for the ten consecutive trading days preceding the conversion date, except that the conversion price cannot be lower than $0.6175. Based on securities and stock exchange regulations, the agreement limits the percentage of the Company’s common shares that may be held at any time by the debenture holder, which effectively limits the amount of principal and interest that the debenture holder may convert without disposing of shares received in earlier conversions. The agreement includes customary representations and warranties, as well as provisions for conversion price adjustments that prevent dilution of the holder’s conversion shares in the event the Company issues additional shares of its common stock prior to the maturity or full conversion of the debentures. At its option, the Company may redeem all or any portion of the outstanding principal and accrued interest prior to the maturity date at a 15% premium to the principal amount, provided that the trading price of its common stock at that time is less than the $2.47 fixed conversion price and it provides the holder with ten business days’ written notice to allow the holder the opportunity to elect conversion of the debentures prior to the redemption. As of December 31, 2021, the convertible debenture holder has elected to fully convert the total $5,000,000 principal balance of the convertible debentures and $58,788 in accrued interest to the Company’s common shares, receiving 3,181,916 common shares at an average conversion price of $1.59, as set forth in the table below. Accrued and Principal Unpaid Total Common Amount Interest Conversion Conversion Shares Conversion Date Converted Converted Amount Price Issued January 6, 2021 $ 100,000 $ 411 $ 100,411 $ 1.9079 52,629 January 14, 2021 200,000 1,534 201,534 1.9079 105,631 January 15, 2021 300,000 164 300,164 1.9079 157,327 January 21, 2021 300,000 740 300,740 2.0060 149,920 January 26, 2021 500,000 411 500,411 2.0060 249,457 February 9, 2021 100,000 192 100,192 2.0078 49,901 February 9, 2021 400,000 13,699 413,699 2.0078 206,046 February 10, 2021 500,000 219 500,219 2.0078 249,138 February 17, 2021 200,000 1,055 201,055 2.0193 99,567 March 10, 2021 400,000 2,589 402,589 1.5637 257,459 March 11, 2021 250,000 69 250,069 1.5637 159,921 March 12, 2021 250,000 34 250,034 1.5637 159,899 March 12, 2021 250,000 28,151 278,151 1.5637 177,880 April 28, 2021 250,000 8,048 258,048 1.1007 234,440 May 3, 2021 250,000 685 250,685 1.1007 227,750 May 10, 2021 250,000 719 250,719 1.1641 215,376 May 11, 2021 500,000 68 500,068 1.1641 429,575 Total Conversions $ 5,000,000 $ 58,788 $ 5,058,788 3,181,916 The principal amount outstanding of the convertible debentures as of December 31, 2021 and December 31, 2020 was $0 and $3,500,000, respectively. As of December 31, 2021, and December 31, 2020, the carrying amount of the convertible debentures, net, was $0 and $2,260,565, respectively. Notes payable As of December 31, 2021 and 2020, the Company had a note payable outstanding in the principal amount of $0 and $176,300, respectively, under the Small Business Administration’s Paycheck Protection Program (the “SBA PPP Loan Program”). This note was issued on April 30, 2020, on behalf of a subsidiary, MDR PMI Greensboro TRS, LLC, the entity that operates the Hampton Inn Property. The Company used these funds pursuant to the limitations established by the SBA PPP Loan Program for payroll and other eligible expenses for the Hampton Inn Property. Under the terms of the loan, all, a portion or none of the loan may be forgiven, based on criteria established by the SBA PPP Loan Program. The Company expended the loan funds in accordance with the criteria required for forgiveness and on June 14, 2021, the Company received confirmation that the note payable had been forgiven, in full, including $1,978 of accrued interest. The forgiven principal and interest were recognized as a gain upon debt extinguishment and are recorded on the Company’s consolidated statement of operations as other income. Interest expense Interest expense, including amortization of capitalized issuance costs consists of the following: For the year ended December 31, 2021 Amortization Mortgage of discounts Other Interest and capitalized interest Expense issuance costs expense Total Franklin Square $ 720,003 $ 9,325 $ — $ 729,328 Hanover Square 438,931 12,902 — 451,833 Hampton Inn 456,300 9,000 10,544 475,844 Ashley Plaza 427,280 17,431 — 444,711 Clemson Best Western 561,821 22,437 6,688 590,946 Brookfield Center 189,685 11,352 — 201,037 Lancer Center 166,026 17,971 — 183,997 Greenbrier Business Center 63,429 924 — 64,353 Parkway Center 19,895 1,838 — 21,733 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 204,383 400,000 604,383 Amortization and interest on convertible debentures — 1,718,487 42,486 1,760,973 Line of credit, short term — — 3,118 3,118 Other interest — — 1,999 1,999 Total interest expense $ 3,043,370 $ 2,026,050 $ 464,835 $ 5,534,255 For the year ended December 31, 2020 Amortization Mortgage of discounts and Other Interest capitalized interest Expense issuance costs expense Total Franklin Square $ 682,105 $ 16,237 $ — $ 698,342 Hanover Square 433,007 12,868 — 445,875 Hampton Inn 674,331 122,310 14,573 811,214 Ashley Plaza 434,305 17,436 — 451,741 Clemson Best Western 563,360 89,748 9,168 662,276 Brookfield Center 192,281 11,352 — 203,633 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 162,375 344,444 506,819 Amortization and interest on convertible debentures — 119,870 16,301 136,171 Line of credit, short term — 10,000 26,699 36,699 Related party notes payable, short term — — 5,835 5,835 Other interest — — 2,021 2,021 Total interest expense $ 2,979,389 $ 562,196 $ 419,041 $ 3,960,626 Interest accrued and accumulated amortization of capitalized issuance costs consist of the following: As of December 31, 2021 As of December 31, 2020 Accumulated Accumulated amortization of amortization capitalized Accrued of capitalized Accrued interest issuance costs interest issuance costs Franklin Square $ — $ 2,364 $ 57,774 $ 65,710 Hanover Square 38,287 46,990 35,820 34,088 Hampton Inn — — 58,211 424,691 Ashley Plaza — 40,679 36,649 23,248 Clemson Best Western 47,716 134,622 47,716 112,185 Brookfield Center 15,979 25,542 16,264 14,190 Lancer Center 22,042 17,971 — — Greenbrier Business Center 15,482 924 — — Parkway Center 9,966 1,838 — — Amortization and accrued preferred stock dividends (1) on mandatorily redeemable preferred stock 70,004 366,758 70,004 162,375 Amortization and interest on convertible debentures — — 16,301 119,870 Line of credit, short term — — 732 — Total $ 219,476 $ 637,688 $ 339,471 $ 956,357 (1) Recorded as accrued interest under accounts payable and accrued liabilities on the Company’s consolidated balance sheets as of December 31, 2021 and 2020, respectively. Debt Maturity The Company’s scheduled principal repayments on indebtedness as of December 31, 2021 are as follows: Mortgages Payable Associated Mortgages With Assets Payable Held for Sale Total 2022 $ 872,925 $ 7,750,000 $ 8,622,925 2023 969,781 — 969,781 2024 1,003,349 — 1,003,349 2025 1,281,071 — 1,281,071 2026 10,948,516 — 10,948,516 Thereafter 40,267,724 — 40,267,724 Total principal payments and debt maturities 55,343,366 7,750,000 63,093,366 Less unamortized issuance costs (825,544) (134,632) (960,176) Net principal payments and debt maturities $ 54,517,822 $ 7,615,368 $ 62,133,190 |
Rentals under Operating Leases
Rentals under Operating Leases | 12 Months Ended |
Dec. 31, 2021 | |
Rentals under Operating Leases | |
Rentals under Operating Leases | 6. Rentals under Operating Leases Future minimum rents (based on recognizing future rents on the straight-line basis) to be received under noncancelable tenant operating leases for each of the next five years and thereafter, excluding common area maintenance and other expense pass-throughs, as of December 31, 2021 are as follows: 2022 $ 6,550,881 2023 5,703,181 2024 4,489,189 2025 3,746,300 2026 2,601,115 Thereafter 3,927,880 Total minimum rents $ 27,018,546 |
Equity
Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity | |
Equity | 7. Equity The Company has authority to issue 1,000,000,000 shares consisting of 750,000,000 shares of common stock, $0.01 par value per share (“Common Shares”), and 250,000,000 shares of preferred stock, $0.01 par value per share (“Preferred Shares”). Substantially all of the Company’s business is conducted through its Operating Partnership. The REIT is the sole general partner of the Operating Partnership and owned a 98.69% and 95.74% interest in the Operating Partnership as of December 31, 2021 and 2020, respectively. Limited partners in the Operating Partnership who have held their units for one year or longer have the right to redeem their common units for cash or, at the REIT’s option, Common Shares at a ratio of one common unit for one common share. Under the Agreement of Limited Partnership, distributions to unit holders are made at the discretion of the REIT. The REIT intends to make distributions in a manner that will result in limited partners of the Operating Partnership receiving distributions at the same rate per unit as dividends per share are paid to the REIT’s holders of Common Shares. April 2021 Common Stock Issuance On April 13, 2021, the Company issued and sold 8,000,000 Common Shares at an offering price of $1.50 per share. Net proceeds from the issuance totaled $10,886,337, which includes the impact of discounts and offering costs, including the underwriter’s selling commissions and estimated legal and accounting fees. Form S- Shelf Registration On June 21, 2021, the Company filed a shelf registration statement on Form S-3 with the United States Securities and Exchange Commission (“SEC”). The registration statement is intended to provide the Company additional flexibility to finance future business opportunities through timely and cost-effective access to capital markets. Under the shelf registration statement, the Company may, from time to time, issue common stock up to an aggregate amount of $150 million. The shelf registration statement was declared effective by the SEC on July 27, 2021. The Company has incurred $84,926 in legal costs, filing fees and other costs associated with this registration which are recorded as offering costs as part of stockholders’ equity on the Company’s consolidated balance sheet as of December 31, 2021. No such costs were incurred during the year ended December 31, 2020. Standby Equity Purchase Agreement On November 17, 2021, the Company entered into a Standby Equity Purchase Agreement (the “SEPA”) with a financing entity. Under this agreement, the Company will be able to sell up to $6,665,299 of its shares of common stock at the Company’s request any time during the 36 months following the execution of the SEPA. The shares would be purchased at 96.5% of the market price (as defined in the agreement) and would be subject to certain limitations, including that the financing entity could not purchase any shares that would result in it owning more than 4.99% of the Company’s common stock. As of December 31, 2021, the Company had not sold any shares under this agreement. (See Note 11, Subsequent events, below, for disclosures regarding issuances under the SEPA subsequent to December 31, 2021.) Common Stock Repurchase Plan In December 2021, the Company’s board of directors approved a program to purchase up to 500,000 shares of the Company’s common stock in the open market, up to a maximum price of $4.80 per share. The repurchase program does not obligate the Company to acquire any particular amount of shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. As of December 31, 2021, the Company had not repurchased any of its common shares under this plan. (See Note 11, Subsequent Events, below.) Common shares and operating partnership units outstanding As of December 31, 2021 and 2020, respectively, there were 16,266,148 and 5,016,976 common units of the Operating Partnership outstanding with the REIT owning 16,052,617 and 4,803,445, respectively, of these common units. As of December 31, 2021 and 2020, respectively, there were 16,052,617 and 4,803,287 Common Shares of the REIT outstanding. As of December 31, 2021 and 2020, respectively, there were 213,531 and 119,681 common units of the Operating Partnership that were eligible for conversion to the Company’s Common Shares. 2018 Equity Incentive Plan The Company’s 2018 Equity Incentive Plan (the “Plan”) was adopted by the Company’s Board of Directors on July 27, 2018 and approved by the Company’s shareholders on August 23, 2018. The Plan permits the grant of stock options, stock appreciation rights, stock awards, performance units, incentive awards and other equity-based awards (including LTIP units of the Company’s Operating Partnership) to its employees or an affiliate (as defined in the Plan) of the Company and for up to the greater of (i) 240,000 shares of common stock and (ii) eight percent (8%) of the number of fully diluted shares of the Company’s Common Shares (taking into account interests in the Operating Partnership that may become convertible into Common Shares). On March 11, 2020, the Company’s Compensation Committee approved a grant of 156,522 shares of Common Shares to two employees of the Manager who also serve as directors of the Company, a grant of 65,215 Common Shares to the Company’s five independent directors, and a grant of 26,087 shares to the chief financial officer of the Company. The effective date of the grants was March 11, 2020. The Common Shares granted vest immediately and are unrestricted. However, the Plan includes other restrictions on the sale of shares issued under the Plan. Because the Common Shares vested immediately, the fair value of the grants, or $569,995, was recorded to share based compensation expense on the Company’s consolidated statements of operations on the effective date of the grant. The fair value of the grants was determined by the market price of the Company’s Common Shares on the effective date of the grant. On March 16, 2021, the Company’s Compensation Committee approved a grant of 40,356 Common Shares to the Company’s three independent directors, and a grant of 26,900 shares to the chief financial officer of the Company. The effective date of the grants was March 16, 2021. The Common Shares granted vest immediately and are unrestricted. However, the Plan includes other restrictions on the sale of shares issued under the Plan. Because the Common Shares vested immediately, the fair value of the grants, or $149,981, was recorded to share based compensation expense on the Company’s consolidated statements of operations on the effective date of the grant. The fair value of the grants was determined by the market price of the Company’s Common Shares on the effective date of the grant. On each January 1 during the term of the Plan, the maximum number of shares of common stock that may be issued under the Plan will increase by eight percent (8%) of any additional shares of common stock or interests in the Operating Partnership issued (i) after the completion date the Company’s initial registered public offering of common stock, in the case of the January 1, 2019 adjustment, or (ii) in the preceding calendar year, in the case of any adjustment subsequent to January 1, 2020. As of December 31, 2021 the shares available for issuance under the plan was 9,593 shares. As of January 1, 2022, the shares available for issuance under the plan was adjusted to 904,146 shares. Earnings per share Basic earnings per share for the Company’s Common Shares is calculated by dividing income (loss) from continuing operations, excluding the net income (loss) attributable to noncontrolling interests, by the Company’s weighted-average number of Common Shares outstanding during the period. Diluted earnings per share is computed by dividing the net income attributable to common shareholders, excluding the net loss attributable to noncontrolling interests, by the weighted average number of Common Shares, including any dilutive shares. As of December 31, 2021 and 2020, respectively, 213,531 and 119,681 of the Operating Partnership’s 213,531 common units outstanding were eligible to be converted, on a one-to-one basis, into Common Shares. The Operating Partnership’s common units and the equivalent common shares attributable to the convertible debentures have been excluded from the Company’s diluted earnings per share calculation because their inclusion would be antidilutive. The Company’s loss per common share is determined as follows: Year ended December 31, 2021 2020 Basic and diluted shares outstanding Weighted average Common Shares – basic 13,092,937 4,709,980 Effect of conversion of operating partnership units 213,531 119,681 Effect of conversion of convertible debentures (1) — 1,843,022 Weighted average Common Shares – diluted 13,306,468 6,672,683 Calculation of earnings per share – basic and diluted Net loss attributable to common shareholders $ (4,364,264) $ (8,180,609) Weighted average Common Shares – basic and diluted 13,092,937 4,709,980 Loss per share – basic and diluted $ (0.33) $ (1.74) (1) Represents the number of shares that would be issued if all outstanding convertible debentures and accrued interest were converted into CommonShares on December 31, 2020 at a price equal to 88 percent of the lowest volume weighted average price for the prior 10 trading days, or $1.9079 pershare. Dividends and Distributions During the year ended December 31, 2021, dividends in the amount of $0.02 per share were paid on August 5, 2021, to shareholders of record on August 2, 2021 on October 27, 2021 to shareholders of record on October 25, 2021. During the year ended December 31, 2020, dividends in the amount of $0.125 were paid on March 10, 2020 to shareholders of record on February 11, 2020. Total dividends and distributions to noncontrolling interests paid during the years ended December 31, 2021 and 2020, respectively, are as follows: Year ended December 31, 2021 2020 Common shareholders (dividends) $ 642,105 $ 562,537 Hampton Inn Property noncontrolling interest (distribution) 466,258 — Hanover Square Property noncontrolling interest (distributions) 34,400 327,840 Operating Partnership unit holders (distributions) 8,541 27,356 Total dividends and distributions $ 1,151,304 $ 917,733 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8. Commitments and Contingencies Insurance The Company carries comprehensive liability, fire, extended coverage, business interruption and rental loss insurance covering all of the properties in its portfolio, in addition to other coverages that may be appropriate for certain of its properties. Additionally, the Company carries a directors and officers liability insurance policy that covers such claims made against the Company and its directors and officers. The Company believes the policy specifications and insured limits are appropriate and adequate for its properties given the relative risk of loss, the cost of the coverage and industry practice; however, its insurance coverage may not be sufficient to fully cover its losses. Concentration of Credit Risk The Company is subject to risks incidental to the ownership and operation of commercial real estate. These risks include, among others, the risks normally associated with changes in the general economic climate, trends in the retail industry, creditworthiness of tenants, competition for tenants and customers, changes in tax laws, interest rates, the availability of financing and potential liability under environmental and other laws. The Company’s portfolio of properties is dependent upon regional and local economic conditions and is geographically concentrated in the Mid-Atlantic, specifically in South Carolina, North Carolina and Virginia, which represented 100 percent of the total annualized base revenues of the properties in its portfolio as of December 31, 2021. The Company’s geographic concentration may cause it to be more susceptible to adverse developments in those markets than if it owned a more geographically diverse portfolio. Additionally, the Company’s retail shopping center properties depend on anchor stores or major tenants to attract shoppers and could be adversely affected by the loss of, or a store closure by, one or more of these tenants. Other Risks and Uncertainties Since March 2020, the Company’s investment properties have been significantly impacted by (i) measures taken by local, state and federal authorities to mitigate the impact of COVID-19, such as mandatory business closures, quarantines, restrictions on travel and “shelter-in-place” or “stay-at-home” orders and (ii) significant changes in consumer behavior and business and leisure travel patterns. While most, if not all, of the initial measures have been relaxed by the respective governmental authorities, with the uncertainty resulting from the continued spread of COVID-19 and its new variants, and the possibility that changes in consumer behavior and business and leisure travel patterns will continue, the negative impact on room demand for our hotel properties and consumer demand for the goods and services of our retail tenants within our portfolio could continue to be significant in future periods. Retail Center and Flex Center Properties As of the date of this Annual Report on Form 10-K, all of the tenants in the Company’s retail properties and flex properties are open. As is the case with retail landlords across the U.S., the Company received a number of rent relief requests from tenants which were impacted by mandatory business closures, quarantines, restrictions on travel and “shelter-in-place” or “stay-at-home” orders and significant changes in consumer behavior. The Company evaluated each of these requests on a case-by-case basis. As of the date of this Annual Report on Form 10-K, the Company has granted lease concessions in the form of (i) rent deferrals or (ii) rent abatements. In addition, during the year ended December 31, 2020, a tenant in the Franklin Square Property defaulted on its lease and abandoned its premises, resulting in the recognition of the loss on impairment recorded during the year ended December 31, 2020. During the year ended December 31, 2020, a second tenant in the Hanover Square Property which was operating under bankruptcy protection, did not renew its lease upon its expiration. However, this space has been re-leased. The deferral and abatement agreements, and the lease abandonment, have reduced the rent revenues the Company has recognized during the year ended December 31, 2021, and will reduce the rent revenues the Company expects to receive in future periods, as discussed below. Under the rent deferral agreements, the tenants have agreed to repay deferred and unpaid rent over a specified time period or before a certain date. Under these rent deferral agreements reached during the year ended December 31, 2020 (the Company did not enter into any such deferral agreements during the year ended December 31, 2021), the Company agreed to defer $81,773 and $228,345 in base rent payments during the years ended December 31, 2021 and 2020, respectively. Deferred rent is recognized as retail center property revenues or flex center property revenues on the Company’s consolidated statement of operations and as rent and other receivables on the Company’s consolidated balance sheets. A summary of the rents deferred for the years ended December 31, 2021 and 2020, and the associated repayment of these rent deferrals for the years ended December 31, 2023, 2022 and 2021, respectively, is set forth in the following table. Rent Deferrals Rent Deferral Repayments Year ended Year ended Number December 31, December 31, of Total Total Tenants 2020 2021 Deferrals 2021 2022 2023 Repayments Franklin Square 1 $ 56,250 $ — $ — $ — $ 53,581 $ 2,669 $ 56,250 Hanover Square 1 26,833 — — 26,833 — — 26,833 Ashley Plaza — — — — — — — — Brookfield Center 1 145,262 81,773 81,773 — 227,035 — 227,035 Total 3 $ 228,345 $ 81,773 $ 81,773 $ 26,833 $ 280,616 $ 2,669 $ 310,118 Under the rent abatement agreements reached during the year ended December 31, 2020 (the Company did not enter into any such abatement agreements during the year ended December 31, 2021), the Company agreed to permanently abate rent in exchange for lease extensions of between one Rent Abatements For the year ended December 31, Number of Total Rent Tenants 2020 2021 2022 Abated Franklin Square 2 $ 204,721 $ 334,871 $ 139,530 $ 679,122 Hanover Square 2 71,971 104,400 34,800 211,171 Ashley Plaza 2 70,205 — — 70,205 Brookfield Center — — — — — Total 6 $ 346,897 $ 439,271 $ 174,330 $ 960,498 In addition to the deferrals and abatements, two tenants in the Company’s retail property centers declared bankruptcy and a third tenant defaulted on its lease during the year ended December 31, 2020. While under bankruptcy protection, the first tenant’s term expired on June 30, 2020 and the Company was unable to collect rent totaling $18,750. This rent was recognized and then written off and is recorded as bad debt expense on the Company’s consolidated statement of operations for the year ended December 31, 2020. No such amounts related to this lease were recorded during the year ended December 31, 2021. A second tenant declared bankruptcy and then emerged from bankruptcy protection during the year ended December 31, 2020. As part of the bankruptcy proceeding, the tenant’s lease was restructured, resulting in rent abatements of $53,760 and $77,653 for the years ended December 31, 2021 and 2020, respectively. Additionally, the Company agreed to abate base rent of $22,760 for the year ended December 31, 2022 and $7,300 for the year ended December 31, 2023. Under the restructured lease, the Tenant’s lease term, which originally expired in 2023, was extended for one five-year period. A third tenant defaulted on its lease and abandoned its premises. During the year ended December 31, 2020, the Company wrote off a total of $34,556 in rent and CAM. Of this amount, $16,842 was initially recorded as retail center property revenues, $8,817 was initially recorded as retail property tenant reimbursements on the Company’s consolidated statement of operations for the year ended December 31, 2020 and $8,897 was initially recorded as retail center property revenues and retail property tenant reimbursements on the Company’s consolidated statement of operations for the year ended December 31, 2019. These amounts were then recorded as bad debt expense on the Company’s consolidated statement of operations for the year ended December 31, 2020. No such amounts related to this tenant were recorded to bad debt expense for the year ended December 31, 2021. A summary of rent revenues that were lost due to bankruptcies, restructurings and defaults for the years ended December 31, 2020 through December 31, 2025 are set forth in the table below. Rent Losses and Reductions Due to Bankruptcies, Bankruptcy Restructuring and Tenant Default Number Year ended December 31, Total Rent of Tenants 2020 2021 2022 2023 2024 2025 Reductions Franklin Square 1 $ 77,898 $ 113,688 $ 113,688 $ 113,688 $ 113,688 $ 75,792 $ 608,442 Hanover Square 1 14,563 — — — — — 14,563 Ashley Plaza 1 77,653 53,760 22,760 7,300 — — 161,473 Brookfield Center — — — — — — — — Total 3 $ 170,114 $ 167,448 $ 136,448 $ 120,988 $ 113,688 $ 75,792 $ 784,478 In return for (i) granting abatements and (ii) restructuring the lease of the tenant under bankruptcy protection, the Company received lease extension agreements of between one and five years, resulting in additional future rents payable under these leases as follows. These amounts are included in future minimum rents in Note 6, above, and summarized in the following table. Additional Rent Under Term Extensions (1) For the year ended December 31, 2022 2023 2024 2025 Thereafter Total Franklin Square $ 161,849 $ 277,456 $ 333,039 $ 360,830 $ 111,165 $ 1,244,339 Hanover Square 242,069 259,306 76,550 — — 577,925 Ashley Plaza — 124,993 125,000 128,333 744,858 1,123,184 Total $ 403,918 $ 661,755 $ 534,589 $ 489,163 $ 856,023 $ 2,945,448 (1) Excludes future rent payments based on tenant’s monthly sales revenues. There is no assurance that the Company will receive these future rent payments. While the Company’s rent collections from its retail and flex center properties have stabilized, the extent of the continued impact of COVID-19 and its new variants on revenues from the Company’s retail and flex center properties and tenants remains uncertain and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the continued efficacy of vaccines against new variants, development and deployment of of treatments, and potential mutations of COVID-19 and the response thereto. Revenues will continue to be impacted by the deferral and abatement agreements (discussed above) that the Company has granted to various tenants and could continue to be negatively impacted until consumer demand for the goods and services of the Company’s retail and flex center tenants returns to levels prior to the virus outbreak. Additionally, the direct and indirect economic effects of the pandemic and containment measures and the potential for changes in consumer behavior and business and leisure travel patterns could continue to have a significant negative impact on consumer demand for the goods and services of the Company’s retail tenants within its portfolio in the coming months. Hotel Properties Beginning in March 2020, COVID-19 caused widespread cancellations of both business and leisure travel throughout the United States, resulting in significant decreases in the Company’s revenues from the Hampton Inn Property (which the Company sold on August 31, 2021) and the Clemson Best Western Property, and the hospitality industry as a whole. With the overall uncertainty of the longevity of COVID-19 in the U.S. and the resulting economic decline, it is difficult to project the duration of revenue declines for the industry and the Company. Operating statistics for the years ended December 31, 2021, 2020 and 2019, for the Hampton Inn Property were as follows: Occupancy Average Daily Rate Hampton Inn Property 2021 2020 2019 2021 2020 2019 January 47.8 % 41.6 % 43.9 % $ 72.85 $ 100.41 $ 94.57 February 68.3 % 72.0 % 51.9 % 81.74 102.73 105.15 March 51.8 % 33.3 % 64.1 % 94.10 106.98 109.11 April 56.3 % 25.7 % 62.3 % 93.46 65.15 149.33 May 66.1 % 41.5 % 55.8 % 102.11 67.87 111.37 June 70.4 % 49.6 % 72.1 % 126.38 73.40 103.89 July 80.5 % 65.1 % 60.8 % 104.80 71.34 110.57 August 69.5 % 50.3 % 75.7 % 101.92 77.73 107.29 September (1) N/A % 59.8 % 65.0 % N/A 80.27 105.22 October N/A % 41.8 % 75.0 % N/A 99.43 160.01 November N/A % 28.8 % 66.6 % N/A 83.02 106.43 December N/A % 24.4 % 48.7 % N/A 75.67 99.43 Full Year N/A % 44.4 % 60.6 % N/A $ 84.10 $ 113.41 (1) The Company sold the Hampton Inn Property on August 31, 2021. Accordingly, no statistical data is presented for periods after the sale or for the full year ending December 31, 2021. During the period of the year ended December 31, 2020 that was impacted by COVID-19 (March through December 2020) significant portions of the Hampton Inn’s occupancy was generated by non-traditional sources, including an agreement with the City of Greensboro to house homeless families. During this period, this agreement resulted in 5,704 room nights of occupancy, or approximately 28 percent of the total occupied rooms during the year ended December 31, 2020 and 39 percent of the occupied rooms during the nine months of 2020 that were impacted by COVID-19 (March through December 2020). This agreement continued in January and ended in February 2021, resulting in 2,064 room nights of occupancy, or approximately 33 percent of the total occupied rooms during the three months ended March 31, 2021 and 49 percent of the rooms occupied during January and February 2021. While these non-traditional sources of occupancy generated room nights, the average daily rate was significantly lower than prior periods and resulted in significantly reduced hotel property revenues. Operating statistics for the years ended December 31, 2021, 2020 and 2019, for the Clemson Best Western Hotel Property were as follows: Occupancy Average Daily Rate Clemson Best Western Property 2021 2020 2019 (1) 2021 2020 2019 (1) January 100.0 % 24.8 % 27.4 % $ 55.13 $ 77.04 $ 98.10 February 100.0 % 31.9 % 34.8 % 58.83 94.07 92.03 March 100.0 % 26.7 % 67.3 % 59.05 90.58 92.61 April 100.0 % 24.5 % 47.4 % 59.00 68.97 103.92 May 100.0 % 19.9 % 37.5 % 42.23 61.54 109.69 June 100.0 % 24.0 % 38.4 % 39.00 61.24 93.80 July 100.0 % 22.7 % 31.6 % 39.00 56.13 85.34 August 100.0 % 27.0 % 47.2 % 48.03 64.35 111.60 September 100.0 % 65.0 % 38.5 % 59.00 67.59 161.11 October 100.0 % 100.0 % 38.3 % 59.00 58.99 143.35 November 100.0 % 100.0 % 39.3 % 59.00 58.48 121.87 December 100.0 % 99.7 % 28.4 % 19.00 26.94 83.12 Full Year 100.0 % 47.2 % 34.9 % 49.57 $ 59.08 $ 118.64 (1) January through August 2019 data for the Clemson Best Western Property is from the prior owner. September 2019 data is from the September 2019 STR report for the Clemson Best Western Property. Occupancy rates from September 2020 through December 2021 were a result of an agreement by which the Company leased the entire Clemson Best Western Property to Clemson University from September 14, 2020 through December 15, 2020. In January 2021, this agreement was extended through May 5, 2021. In May 2021, this agreement was extended through May 2022. While intense efforts to reduce operating costs have resulted in expense reductions in the period during which the Company’s hotel operations have been impacted by COVID-19, the Company cannot be certain as to what level of savings can continue to be achieved overall to mitigate the material decline in hotel revenues it may continue to experience. The federal government has provided assistance to the industries negatively affected by the virus, including the hospitality industry, and our two hotel properties have received loans under one of these programs (see Note 5), but the aid has not mitigated the material reduction in revenue resulting from COVID-19 travel impacts. The Company was not eligible to participate in the second round of the Payroll Protection Program loans announced in December 2020. Due to the depressed outlook for leisure and business travel, on which both of the Company’s hotel properties significantly relied, the Company sold its Hampton Inn Property and has committed to a plan to sell the Clemson Best Western Property as discussed above. The Company closed on the sale of the Hampton Inn Property on August 31, 2021, but there is no assurance that the Company will be able to complete the sale of the Clemson Best Western Property. Despite the Company’s decision to sell its hotel properties, the Company has not removed hotel properties from its investment policy and will consider future opportunistic acquisitions of hotel properties in the future. Until such time as the virus is contained or eradicated and room demand for the Company’s hotel property and consumer demand for the goods and services of the Company’s retail and flex center tenants returns to more customary levels, the Company may continue to experience material reductions in its operating revenue. The anticipated negative impact on revenues, discussed above, from the Company’s retail, flex center and hotel property has also, and will continue, to impact the Company’s liquidity, resulting in reduced cash flow to meet the Company’s obligations and to fund dividend distribution payments. Regulatory and Environmental As the owner of the buildings on its properties, the Company could face liability for the presence of hazardous materials (e.g., asbestos or lead) or other adverse conditions (e.g., poor indoor air quality) in its buildings. Environmental laws govern the presence, maintenance, and removal of hazardous materials in buildings, and if the Company does not comply with such laws, it could face fines for such noncompliance. Also, the Company could be liable to third parties (e.g., occupants of the buildings) for damages related to exposure to hazardous materials or adverse conditions in its buildings, and the Company could incur material expenses with respect to abatement or remediation of hazardous materials or other adverse conditions in its buildings. In addition, some of the Company’s tenants routinely handle and use hazardous or regulated substances and wastes as part of their operations at the Company’s properties, which are subject to regulation. Such environmental and health and safety laws and regulations could subject the Company or its tenants to liability resulting from these activities. Environmental liabilities could affect a tenant’s ability to make rental payments to the Company, and changes in laws could increase the potential liability for noncompliance. This may result in significant unanticipated expenditures or may otherwise materially and adversely affect the Company’s operations. The Company is not aware of any material contingent liabilities, regulatory matters or environmental matters that may exist. Seasonality The hotel industry historically has been seasonal in nature. Seasonal variations in occupancy at the Company’s hotels may cause quarterly fluctuations in its revenues. Historically, occupancy rates and hotel revenues for the Company’s Clemson Best Western Property are highest in the spring and fall months, due to sporting events at Clemson University. However, throughout most of 2020 and all of 2021, the Clemson Best Western Property was fully occupied by Clemson University. To the extent that cash flow from operations is insufficient during any quarter due to temporary or seasonal fluctuations in revenue, the Company expects to utilize cash on hand or available financing sources to meet cash requirements. Litigation The Company is not currently involved in any litigation or legal proceedings. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions | |
Related Party Transactions | 9. Related Party Transactions Medalist Fund Manager, Inc. (the “Manager”) The Company is externally managed by the Manager, which makes all investment decisions for the Company. The Manager oversees the Company’s overall business and affairs and has broad discretion to make operating decisions on behalf of the Company and to make investment decisions. The Company pays the Manager a monthly asset management fee equal to 0.125% of stockholders’ equity, payable in arrears in cash. For purposes of calculating the asset management fee, the Company’s stockholders’ equity means: (a) the sum of (1) the net proceeds from (or equity value assigned to) all issuances of the Company’s equity and equity equivalent securities (including common stock, common stock equivalents, preferred stock and OP Units issued by the Company’s operating partnership) since inception (allocated on a pro rata daily basis for such issuances during the fiscal quarter of any such issuance), plus (2) the Company’s retained earnings at the end of the most recently completed calendar quarter (without taking into account any non-cash equity compensation expense incurred in current or prior periods), less (b) any amount that the Company has paid to repurchase its common stock issued in this or any subsequent offering. Stockholders’ equity also excludes (1) any unrealized gains and losses and other non-cash items (including depreciation and amortization) that have impacted stockholders’ equity as reported in the Company’s consolidated financial statements prepared in accordance with GAAP, and (2) one-time events pursuant to changes in GAAP, and certain non-cash items not otherwise described above, in each case after discussions between the Company’s Manager and its independent director(s) and approval by a majority of its independent directors. For the years ended December 31, 2021 and 2020, the Company incurred $817,029 and $605,414, in asset management The Manager also receives an acquisition fee of 2.0% of the purchase price plus transaction costs, for each property acquired or investment made on the Company’s behalf at the closing of the acquisition of such property or investment, in consideration for the Manager’s assistance in effectuating such acquisition. Acquisition fees are allocated and added to the fair value of the tangible assets acquired and recorded as part of investment properties, net, on the Company’s consolidated balance sheets. On March 16, 2021, the Manager agreed to defer one-half of all acquisition fees until the Company’s stock price reaches $5.00 per share. For the year ended December 31, 2021, the Company incurred $503,910 in acquisition fees associated with the Lancer Center Property, Greenbrier Business Center Property and Parkway Property, which were allocated and added to the fair value of the Lancer Center Property, Greenbrier Business Center Property and Parkway Property tangible assets. One half of the acquisition fees, or $251,955 was paid in cash and one half of the acquisition fee was accrued until such time that the Company’s stock price reaches $5.00 per share. The accrued portion of the acquisition fee is recorded under accounts payable and accrued liabilities on the Company’s consolidated balance sheet as of December 31, 2021. No acquisition fees were earned or paid during the year ended December 31, 2020. The Manager will be entitled to an incentive fee, payable quarterly, equal to an amount, not less than zero, equal to the difference between (1) the product of (x) 20% and (y) the difference between (i) Adjusted Funds from Operations (AFFO) (as further defined below) for the previous 12-month period, and (ii) the product of (A) the weighted average of the issue price of equity securities issued in this offering and in future offerings and transactions, multiplied by the weighted average number of all shares of common stock outstanding on a fully-diluted basis (including any restricted stock units, any restricted shares of common stock and OP Units) in the previous 12-month period, exclusive of equity securities issued prior to this offering, and (B) 7%, and (2) the sum of any incentive fee paid to the Manager with respect to the first three calendar quarters of such previous 12-month period. For purposes of calculating the incentive fee during the first years after completion of this offering, adjusted funds from operations (“AFFO”) will be determined by annualizing the applicable period following completion of this offering. AFFO is calculated by removing the effect of items that do not reflect ongoing property operations. The Company further adjusts funds from operations (“FFO”) for certain items that are not added to net income in the National Association of Real Estate Investment Trusts’ (NAREIT) definition of FFO, such as acquisition expenses, equity based compensation expenses, and any other non-recurring or non-cash expenses, which are costs that do not relate to the operating performance of the Company’s properties, and subtract recurring capital expenditures (and, when calculating the incentive fee only, we further adjust FFO to include any realized gains or losses on real estate investments). No incentive fees were earned or paid during the year ended December 31, 2021 or 2020. Other related parties The Company pays Shockoe Properties, LLC, a subsidiary of Dodson Properties, an entity in which one of the owners of the Manager holds a 6.32 percent interest, an annual property management fee three fees are paid in arrears on a monthly basis. During the years ended December 31, 2021 and 2020, the Company paid Shockoe Properties, LLC property management fees of $200,216 and $146,417, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Information | |
Segment Information | 10. Segment Information The Company establishes operating segments at the property level and aggregates individual properties into reportable segments based on product types in which the Company has investments. As of December 31, 2021, the Company had the following reportable segments: retail center properties, flex center properties and hotel properties. During the periods presented, there have been no material intersegment transactions. Although the Company’s flex center property has tenants that are similar to tenants in its retail center properties, the Company considers its flex center properties as a separate reportable segment. Flex properties are considered by the real estate industry as a distinct subset of the industrial market segment. Flex properties contain a mix of industrial/warehouse and office spaces. Warehouse space that is not air conditioned can be used flexibly by building office or showroom space that is air conditioned, depending on tenants’ needs. Net operating income (“NOI”) is a non-GAAP financial measure and is not considered a measure of operating results or cash flows from operations under GAAP. NOI is the primary performance measure reviewed by management to assess operating performance of properties and is calculated by deducting operating expenses from operating revenues. Operating revenues include rental income, tenant reimbursements, hotel income, and other property income; and operating expenses include retail center property and hotel operating costs. The NOI performance metric consists of only revenues and expenses directly related to real estate rental operations. NOI reflects property acquisitions and dispositions, occupancy levels, rental rate increases or decreases, and the recoverability of operating expenses. NOI, as the Company calculates it, may not be directly comparable to similarly titled, but differently calculated, measures for other REITs. Asset information and capital expenditures by segment are not reported because the Company does not use these measures to assess performance. Depreciation and amortization expense, along with other expense and income items, are not allocated among segments. The following table presents property operating revenues, expenses and NOI by product type: For the year ended December 31, Hotel properties Retail center properties Flex center property Total 2021 2020 2021 2020 2021 2020 2021 2020 Revenues $ 4,635,331 $ 3,337,176 $ 5,634,396 $ 5,152,150 $ 1,202,822 $ 786,834 $ 11,472,549 $ 9,276,160 Operating expenses 3,102,951 3,164,646 1,518,973 1,362,532 343,717 231,209 4,965,641 4,758,387 Bad debt expense — — 38,346 431,143 678 — 39,024 431,143 Net operating income $ 1,532,380 $ 172,530 $ 4,077,077 $ 3,358,475 $ 858,427 $ 555,625 $ 6,467,884 $ 4,086,630 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events | |
Subsequent Events | 11. Subsequent Events As of March 15, 2022, the following events have occurred subsequent to the December 31, 2021 effective date of the consolidated financial statements: Common Stock Dividend On January 20, 2022, a dividend in the amount of $0.02 per share was paid to common stock shareholders and operating partnership unit holders of record on January 13, 2022. Common Stock Issuances Under Standby Equity Purchase Agreement As of March 15, 2022, the date of this Annual Report on Form 10-K, the Company has issued 366,790 shares under the Standby Equity Purchase Agreement (see Note 7, above). Common Stock Grants Under 2018 Equity Incentive Plan On March 2, 2022, the Company's Compensation Committee approved a grant of 60,000 shares of Common Shares to two employees of the Manager who also serve as directors of the Company, a grant of 90,000 Common Shares to the Company's three independent directors, and a grant of 60,000 shares to the chief financial officer of the Company. Mandatorily Redeemable Preferred Stock Dividend On January 20, 2022, a dividend in the amount of $0.50 per share was paid to mandatorily redeemable preferred stock shareholders of record on January 13, 2022 for the period from October 27, 2021 through January 19, 2022. Common Stock Repurchases Subsequent to the December 31, 2021 effective date of the consolidated financial statements, through the date of this Annual Report on Form 10-K, the Company has repurchased a total of 268,070 shares of common stock on the open market under the Common Stock Repurchase Plan at an average price of $1.04 per share. |
Schedule III - Real Estate Prop
Schedule III - Real Estate Properties and Accumulated Depreciation | 12 Months Ended |
Dec. 31, 2021 | |
Schedule III - Real Estate Properties and Accumulated Depreciation | |
Schedule III - Real Estate Properties and Accumulated Depreciation | Medalist Diversified REIT, Inc. and Subsidiaries Schedule III - Real Estate Properties and Accumulated Depreciation December 31, 2021 Initial Cost to Company Gross Amount at Which Carried at Close of Period Buildings, Costs Written Life on Which Improvements Costs Off Due to Depreciation and Furniture, Capitalized Impairment Fully Buildings in Latest Encum- Fixtures & Subsequent to and Loss on Amortized and Accumulated Date of Date Income Statements Description brances Land Equipment Acquisition Disposition Improvements Land Improvements Total Depreciation Construction Acquired is Computed Retail properties The Shops at Franklin Square $ 13,250,000 $ 3,343,164 $ 15,418,158 (1) $ 883,146 $ (309,435) $ (114,459) $ 3,343,164 $ 15,877,410 $ 19,220,574 $ 2,686,982 2006 April 28, 2017 Building - 38 years Gastonia, North Carolina Site Improvements - 13 years Hanover North Shopping Center 10,134,667 3,158,882 8,334,478.00 (1) 219,738.00 — (29,796) 3,158,882 8,524,420 11,683,302 1,226,885 2007 May 8, 2018 Building - 39 years Mechanicsville, Virginia Site Improvements - 12 years Ashley Plaza Shopping Center 11,127,111 3,007,721 11,191,307 (1) 103,249 — (6,132) 3,007,721 11,288,424 14,296,145 1,411,023 1977 August 30, 2019 Building - 26.7 years Goldsboro, North Carolina Site Improvements - 5 years Lancer Center Shopping Center 6,488,034 2,195,125 7,684,251 (1) 192,421 — — 2,195,125 7,876,672 10,071,797 455,898 1978 May 14, 2021 Building - 14.2 years Lancaster, South Carolina Site Improvements - 7.5 years Total retail properties 40,999,812 11,704,892 42,628,194 1,398,554 (309,435) (150,387) 11,704,892 43,566,926 55,271,818 5,780,788 Hotel property Clemson Best Western Inn (2) 7,750,000 2,057,706 8,271,247 239,555 — — 2,057,706 8,510,802 10,568,508 722,300 1982 September 27, 2019 Building - 30 years Clemson, South Carolina Site Improvements - 6.4 years Total hotel properties 7,750,000 2,057,706 8,271,247 239,555 — — 2,057,706 8,510,802 10,568,508 722,300 Flex property Brookfield Center 4,758,344 714,220 5,693,147 (1) 37,802 — — 714,220 5,730,949 6,445,169 579,739 2007 October 3, 2019 Building - 40 years Greenville, South Carolina Site Improvements - 4.3 years Greenbrier Business Center 4,495,000 1,292,894 5,603,909 (1) 2,039 — — 1,292,894 5,605,948 6,898,842 86,014 1987 August 27, 2021 Building - 26 years Chesapeake, Virginia Site Improvements - 10 years Parkway Center 5,090,210 430,549 6,846,487 (1) 3,270 — — 430,549 6,849,757 7,280,306 41,679 1984 November 1, 2021 Building - 42 years Virginia Beach, Virginia Site Improvements - 11 years Total flex properties $ 14,343,554 $ 2,437,663 $ 18,143,543 $ 43,111 $ — $ — $ 2,437,663 $ 18,186,654 $ 20,624,317 $ 707,432 Total investment properties $ 63,093,366 $ 16,200,261 $ 69,042,984 $ 1,681,220 $ (309,435) $ (150,387) $ 16,200,261 $ 70,264,382 $ 86,464,643 $ 7,210,520 (1) Excludes intangible assets (2) Recorded as an asset held for sale on the Company’s consolidated balance sheet as of December 31, 2021. Greenbrier Franklin Hanover Hampton Ashley Clemson Brookfield Lancer Business Square Square Inn Plaza Best Western (1) Center Center Center Parkway Total Investments in real estate - 2021 Balance at beginning of period - January 1, 2021 $ 19,251,826 $ 11,617,856 $ 13,972,091 $ 14,282,764 $ 10,405,855 $ 6,437,433 $ — $ — $ — $ 75,967,825 Additions during period: Acquisitions — — — — — — 9,879,376 6,896,803 7,277,036 24,053,215 Capitalized leasing commissions 15,348 9,992 — 19,513 — 7,736 15,560 2,039 3,270 73,458 Capitalized tenant improvements 45,150 — — — — — 97,929 — — 143,079 Capitalized tenant inducements — — — — — — — — — - Building and site improvements 14,967 85,250 — — 129,654 — 78,932 — — 308,803 Impairment write-offs — — — — — — — — — - Fully amortized tenant improvements (106,717) (29,796) — (6,132) — — — — — (142,645) Furniture, Fixtures and Equipment — — — — 32,999 — — — — 32,999 Dispositions of investment properties — — (13,972,091) — — — — — — (13,972,091) Balance at end of period - December 31, 2021 $ 19,220,574 $ 11,683,302 $ — $ 14,296,145 $ 10,568,508 $ 6,445,169 $ 10,071,797 $ 6,898,842 $ 7,280,306 $ 86,464,643 Accumulated depreciation - 2021 Balance at beginning of period $ 2,181,039 $ 909,211 $ 1,561,841 $ 808,059 $ 722,300 $ 319,263 $ — $ — $ — $ 6,501,713 Additions charged to costs and expenses 505,943 317,674 — 602,964 — 260,476 455,898 86,014 41,679 2,270,648 Write off depreciation of property disposed — — (1,561,841) — — — — — — (1,561,841) Balance at end of period $ 2,686,982 $ 1,226,885 $ — $ 1,411,023 $ 722,300 $ 579,739 $ 455,898 $ 86,014 $ 41,679 $ 7,210,520 Net investments in real estate - December 31, 2021 $ 16,533,592 $ 10,456,417 $ — $ 12,885,122 $ 9,846,208 $ 5,865,430 $ 9,615,899 $ 6,812,828 $ 7,238,627 $ 79,254,123 Investments in real estate - 2020 Balance at beginning of period - January 1, 2020 $ 19,467,626 $ 11,502,073 $ 17,343,770 $ 14,217,764 $ 10,333,813 $ 6,437,433 $ — $ — $ — $ 79,302,479 Additions during period: Capitalized leasing commissions 39,157 — — 5,000 — — — — — 44,157 Capitalized tenant improvements — 12,589 — 60,000 — — — — — 72,589 Capitalized tenant inducements — — — — — — — — — - Building and site improvements — 103,194 62,087 — 67,516 — — — — 232,797 Impairment write-offs (254,957) — (3,494,058) — — — — — — (3,749,015) Fully amortized tenant improvements — — — — — — — — — - Furniture, Fixtures and Equipment — — 60,292 — 4,526 — — — — 64,818 Balance at end of period - December 31, 2020 $ 19,251,826 $ 11,617,856 $ 13,972,091 $ 14,282,764 $ 10,405,855 $ 6,437,433 $ — $ — $ — $ 75,967,825 Accumulated depreciation - 2020 Balance at beginning of period $ 1,646,374 $ 572,300 $ 884,281 $ 200,544 $ 143,603 $ 63,552 $ — $ — $ — $ 3,510,654 Additions charged to costs and expenses 618,262 336,911 677,560 607,515 578,697 255,711 — — — 3,074,656 Impairment write-offs (83,597) — — — — — — — — (83,597) Balance at end of period $ 2,181,039 $ 909,211 $ 1,561,841 $ 808,059 $ 722,300 $ 319,263 $ — $ — $ — $ 6,501,713 Net investments in real estate - December 31, 2020 $ 17,070,787 $ 10,708,645 $ 12,410,250 $ 13,474,705 $ 9,683,555 $ 6,118,170 $ — $ — $ — $ 69,466,112 (1) Recorded as an asset held for sale on the Company’s consolidated balance sheet as of December 31, 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Investment Properties | Investment Properties The Company has adopted Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805) Accounting Standards Codification (“ASC”) 805 mandates that “an acquiring entity shall allocate the cost of an acquired entity to the assets acquired and liabilities assumed based on their estimated fair values at date of acquisition.” ASC 805 results in an allocation of acquisition costs to both tangible and intangible assets associated with income producing real estate. Tangible assets include land, buildings, site improvements, tenant improvements and furniture, fixtures and equipment, while intangible assets include the value of in-place leases, lease origination costs (leasing commissions and tenant improvements), legal and marketing costs and leasehold assets and liabilities (above or below market leases), among others. The Company uses independent, third party consultants to assist management with its ASC 805 evaluations. The Company determines fair value based on accepted valuation methodologies including the cost, market, and income capitalization approaches. The purchase price is allocated to the tangible and intangible assets identified in the evaluation. The Company records depreciation on buildings and improvements utilizing the straight-line method over the estimated useful life of the asset, generally 5 to 42 years. The Company reviews depreciable lives of investment properties periodically and makes adjustments to reflect a shorter economic life, when necessary. Tenant allowances, tenant inducements and tenant improvements are amortized utilizing the straight-line method over the term of the related lease. Amounts allocated to buildings are depreciated over the estimated remaining life of the acquired building or related improvements. Acquisition and closing costs are capitalized as part of each tangible asset on a pro rata basis. Improvements and major repairs and maintenance are capitalized when the repair and maintenance substantially extend the useful life, increases capacity or improves the efficiency of the asset. All other repair and maintenance costs are expensed as incurred. The Company reviews investment properties for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of investment properties may not be recoverable, but at least annually. These circumstances include, but are not limited to, declines in the property’s cash flows, occupancy and fair market value. The Company measures any impairment of investment property when the estimated undiscounted cash flows plus its residual value, is less than the carrying value of the property. To the extent impairment has occurred, the Company charges to income the excess of the carrying value of the property over its estimated fair value. The Company estimates fair value using unobservable data such as projected future operating income, estimated capitalization rates, or multiples, leasing prospects and local market information. The Company may decide to sell properties that are held for use and the sale prices of these properties may differ from their carrying values. The Company did not record any impairment adjustments to its investment properties resulting from events or changes in circumstances during the year ended December 31, 2021. Other than the tenant-specific loss on impairment described below, the Company did not record any impairment adjustments to its investment properties resulting from events or changes in circumstances during the year ended December 31, 2020, that would result in the projected value being below the carrying value of the Company’s properties. During June 2020 a tenant in the Company’s Franklin Square Property notified the Company that it was abandoning its leased premises and defaulting on its lease. The Company determined that the carrying value of certain tangible and intangible assets and liabilities associated with this lease that (i) were recorded as part of the purchase of the Franklin Square Property and (ii) were related to this lease and which were recorded during the Company’s ownership of the Franklin Square Property, should be written off. As a result, the Company recorded a loss on impairment of $223,097 for the year ended December 31, 2020, as follows: Loss on impairment – capitalized tenant inducements $ 89,500 Loss on impairment – capitalized tenant improvements arising from acquisition cost allocation 81,860 Loss on impairment – intangible assets – leasing commissions 18,606 Loss on impairment – intangible assets – legal and marketing costs 6,281 Loss on impairment – intangible assets – leases in place 67,065 Gain on impairment – intangible liabilities – below market leases (40,215) Loss on impairment, net $ 223,097 |
Assets Held for Sale | Assets Held for Sale The Company may decide to sell properties that are held as investment properties. The Company records these properties, and any associated mortgages payable, as held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year. Properties classified as held for sale are reported at the lower of their carrying value or their fair value, less estimated costs to sell. When the carrying value exceeds the fair value, less estimated costs to sell, an impairment charge is recognized. The Company determines fair value based on the three-level valuation hierarchy for fair value measurement. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active; and inputs other than quoted prices. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of December 31, 2020, the Company had committed to a plan to sell the Hampton Inn Property. The Company’s plan was for the sale of an asset group that included the land, site improvements, building, building improvements and furniture, fixtures and equipment associated with the Hampton Inn Property. As of December 31, 2020, the Company determined that the carrying value of the Hampton Inn Property exceeded its fair value, less estimated costs to sell, and recorded impairment of assets held for sale of $3,494,058 on its consolidated statement of operations during the year ended December 31, 2020. There was no such impairment recorded during the year ended December 31, 2021. The impairment of assets held for sale represented the difference between the carrying value of the Hampton Inn Property and its estimated fair value, less estimated closing costs. The Company based its estimate of the fair value of the Hampton Inn Property on the actual contract sale price, less estimated closing costs, a level 2 input. The fair value measurement date was as of December 31, 2020. On August 31, 2021, the Company closed on the sale of the Hampton Inn Property (see Note 3, below). During February 2021, the Company committed to a plan to sell the Clemson Best Western Hotel Property. The Company’s plan is for the sale of an asset group that includes the land, site improvements, building, building improvements and furniture, fixtures and equipment associated with the Clemson Best Western Property. The Company believes that the fair value, less estimated costs to sell, exceeds the Company’s carrying cost in the property, so the Company has not recorded any impairment of assets held for sale related to the Clemson Best Western Property for the year ended December 31, 2021. See Note 3 for additional details on impairment of assets held for sale as of December 31, 2021 and 2020, respectively. |
Intangible Assets and Liabilities, net | Intangible Assets and Liabilities, net The Company determines, through the ASC 805 evaluation, the above and below market lease intangibles upon acquiring a property. Intangible assets (or liabilities) such as above or below-market leases and in-place lease value are recorded at fair value and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. The Company amortizes amounts allocated to tenant improvements, in-place lease assets and other lease-related intangibles over the remaining life of the underlying leases. The analysis is conducted on a lease-by-lease basis. The Company reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of its intangible assets may not be recoverable, but at least annually. The Company did not record any impairment adjustments to its intangible assets during the year ended December 31, 2021. During June 2020, a tenant in the Company’s Franklin Square Property notified the Company that it was abandoning its leased premises and defaulting on its lease. The Company determined that the book value of the intangible assets and liabilities, net, associated with this lease of $51,737 that were recorded as part of the purchase of the Franklin Square Property should be written off. This amount is included in the loss on impairment reported on the Company’s consolidated statement of operations for the year ended December 31, 2020. (See the table above.) Details of the deferred costs, net of amortization, arising from the Company’s purchases of its retail center properties and flex center properties are as follows: December 31, 2021 2020 Intangible Assets Leasing commissions $ 1,153,736 $ 948,427 Legal and marketing costs 163,019 86,786 Above market leases 360,509 402,895 Net leasehold asset 2,523,128 1,818,254 $ 4,200,392 $ 3,256,362 Intangible Liabilities Below market leases, net $ (1,880,612) $ (1,022,497) Capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. Capitalized below-market lease values are amortized as an increase to rental income over the remaining terms of the respective leases. Adjustments to rental revenue related to the above and below market leases during the years ended December 31, 2021 and 2020, respectively, were as follows: For the year ended December 31, 2021 2020 Amortization of above market leases $ (250,504) $ (221,390) Amortization of below market leases 274,528 215,248 $ 24,024 $ (6,142) Amortization of lease origination costs, leases in place and legal and marketing costs represent a component of depreciation and amortization expense. Amortization related to these intangible assets during the years ended December 31, 2021 and 2020, respectively, were as follows: For the year ended December 31, 2021 2020 Leasing commissions $ (208,650) $ (178,915) Legal and marketing costs (37,441) (29,515) Net leasehold asset (847,474) (679,937) $ (1,093,565) $ (888,367) As of December 31, 2021 and 2020, the Company’s accumulated amortization of lease origination costs, leases in place and legal and marketing costs totaled $2,779,370 and $2,353,103, respectively. Future amortization of above and below market leases, lease origination costs, leases in place, legal and marketing costs and tenant relationships is as follows: 2022 2023 2024 2025 2026 2027-2040 Total Intangible Assets Leasing commissions $ 225,858 $ 180,039 $ 140,415 $ 117,224 $ 83,900 $ 406,300 $ 1,153,736 Legal and marketing costs 55,857 41,363 23,911 14,122 7,091 20,675 163,019 Above market leases 182,585 84,928 36,312 19,224 13,562 23,898 360,509 Net leasehold asset 920,572 458,836 297,023 213,034 133,627 500,036 2,523,128 $ 1,384,872 $ 765,166 $ 497,661 $ 363,604 $ 238,180 $ 950,909 $ 4,200,392 Intangible Liabilities Below market leases, net $ (356,054) $ (260,491) $ (191,865) $ (140,004) $ (107,217) $ (824,981) $ (1,880,612) |
Conditional Asset Retirement Obligation | Conditional Asset Retirement Obligation A conditional asset retirement obligation represents a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement depends on a future event that may or may not be within the Company’s control. Currently, the Company does not have any conditional asset retirement obligations. However, any such obligations identified in the future would result in the Company recording a liability if the fair value of the obligation can be reasonably estimated. Environmental studies conducted at the time the Company acquired its properties did not reveal any material environmental liabilities, and the Company is unaware of any subsequent environmental matters that would have created a material liability. The Company believes that its properties are currently in material compliance with applicable environmental, as well as non-environmental, statutory and regulatory requirements. The Company did not record any conditional asset retirement obligation liabilities during the years ended December 31, 2021 and 2020, respectively. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash and cash equivalents. Cash equivalents are carried at cost, which approximates fair value. Cash equivalents consist primarily of bank operating accounts and money markets. Financial instruments that potentially subject the Company to concentrations of credit risk include its cash and equivalents and its trade accounts receivable. The Company places its cash and cash equivalents and any restricted cash held by the Company on deposit with financial institutions in the United States which are insured by the Federal Deposit Insurance Company (“FDIC”) up to $250,000. The Company’s credit loss in the event of failure of these financial institutions is represented by the difference between the FDIC limit and the total amounts on deposit. Management monitors the financial institutions credit worthiness in conjunction with balances on deposit to minimize risk. As of December 31, 2021, the Company held five cash accounts with an aggregate balance that exceeded the FDIC limit by $2,377,633. As of December 31, 2020, the Company held two cash accounts with balances that exceeded the FDIC limit by an aggregate amount of $1,719,233. Restricted cash represents (i) amounts held by the Company for tenant security deposits, (ii) escrow deposits held by lenders for real estate tax, insurance, and operating reserves, (iii) an escrow for the first year of dividends on the Company’s mandatorily redeemable preferred stock, and (iv) capital reserves held by lenders for investment property capital improvements. Tenant security deposits are restricted cash balances held by the Company to offset potential damages, unpaid rent or other unmet conditions of its tenant leases. As of December 31, 2021 and 2020, the Company reported $222,265 and $109,059, respectively, in security deposits held as restricted cash. Escrow deposits are restricted cash balances held by lenders for real estate taxes, insurance and other operating reserves. As of December 31, 2021 and 2020, the Company reported $1,523,837 and $1,352,723, respectively, in escrow deposits. An escrow of $371,111 for the first year of dividends on the Company’s mandatorily redeemable preferred stock was created at issuance and was held by a financial institution under an escrow agreement by which the funds were restricted for payment of dividends on the Company’s mandatorily redeemable preferred stock for the first 12 months. As of December 31, 2021 and 2020, the balance of the preferred dividend escrow was $0 and $97,632, respectively. (See Note 4 for further discussion of the Company’s mandatorily redeemable preferred stock). Capital reserves are restricted cash balances held by lenders for capital improvements, leasing commissions furniture, fixtures and equipment, and tenant improvements. As of December 31, 2021 and 2020, the Company reported $1,267,470 and $674,520, respectively, in capital property reserves. December 31, Property and Purpose of Reserve 2021 2020 Hampton Inn Property - furniture, fixtures and equipment $ — $ 18,460 Clemson Best Western Property - improvements 50,012 50,009 Clemson Best Western Property - furniture, fixtures and equipment 275,109 149,752 Franklin Square Property - leasing costs 700,000 408,278 Brookfield Center Property - maintenance reserve 92,349 48,021 Greenbrier Business Center - capital reserve 150,000 — Total $ 1,267,470 $ 674,520 |
Revenue Recognition | Revenue Recognition Retail and Flex Center Property Revenues The Company recognizes minimum rents from its retail center properties and flex center properties on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset being recorded on the consolidated balance sheets. As of December 31, 2021 and 2020, the Company reported $872,322 and $673,728, respectively, in unbilled rent. The Company’s leases generally require the tenant to reimburse the Company for a substantial portion of its expenses incurred in operating, maintaining, repairing, insuring and managing the shopping center and common areas (collectively defined as Common Area Maintenance or “CAM” expenses). The Company includes these reimbursements, along with other revenue derived from late fees and seasonal events, on the consolidated statements of operations under the captions “Retail center property tenant reimbursements” and “Flex center property tenant reimbursements.” This significantly reduces the Company’s exposure to increases in costs and operating expenses resulting from inflation or other outside factors. The Company accrues reimbursements from tenants for recoverable portions of all these expenses as revenue in the period the applicable expenditures are incurred. The Company calculates the tenant’s share of operating costs by multiplying the total amount of the operating costs by a fraction, the numerator of which is the total number of square feet being leased by the tenant, and the denominator of which is the average total square footage of all leasable buildings at the property. The Company also receives payments for these reimbursements from substantially all its tenants on a monthly basis throughout the year. The Company recognizes differences between previously estimated recoveries and the final billed amounts in the year in which the amounts become final. During the years ended December 31, 2021 and 2020, respectively, the Company recognized $113,493 and $14,934, respectively, in retail center and flex center property tenant reimbursement revenues resulting from differences between previously estimated recoveries and the final billed amounts. The Company recognizes lease termination fees in the period that the lease is terminated and collection of the fees is reasonably assured. During the year ended December 31, 2021, the Company received a $200,000 lease termination fee from a tenant in the Company’s Franklin Square Property. The Company recorded this revenue as other income on the Company’s consolidated statements of operation for the year ended December 31, 2021. For the year ended December 31, 2020, no such termination fee revenues were recognized. Upon early lease termination, any unrecovered intangibles and other assets are written off as a loss on impairment. All unrecovered intangibles and other assets associated with the tenant in the Company’s Franklin Square Property which terminated its lease had been fully depreciated or amortized prior to the termination. Accordingly, during the years ended December 31, 2021 and 2020, respectively, no such loss on impairment was recognized. Hotel Property Revenues Hotel revenues (from the Hampton Inn Property and Clemson Best Western Property) are recognized as earned, which is generally defined as the date upon which a guest occupies a room or utilizes the hotel’s services. Revenues from the Company’s occupancy agreement with Clemson University are recognized as earned, which is as rooms are occupied or otherwise reserved for use by the University. The Hampton Inn Property and Clemson Best Western Property are required to collect certain taxes and fees from customers on behalf of government agencies and remit them back to the applicable governmental agencies on a periodic basis. The Hampton Inn Property and Clemson Best Western Property have a legal obligation to act as a collection agent. The Hampton Inn Property and Clemson Best Western Property do not retain these taxes and fees; therefore, they are not included in revenues. The Hampton Inn Property and Clemson Best Western Property record a liability when the amounts are collected and relieves the liability when payments are made to the applicable taxing authority or other appropriate governmental agency. Hotel Property Operating Expenses All personnel of the Hampton Inn Property and Clemson Best Western Property are directly or indirectly employees of Marshall Hotels and Resorts, Inc. (“Marshall”), the Company’s hotel management firm. In addition to fees and services discussed above, the Hampton Inn Property and Clemson Best Western Property reimburse Marshall for all employee related service costs, including payroll salaries and wages, payroll taxes and other employee benefits paid by Marshall on behalf of the respective property. For the Hampton Inn Property, total amounts incurred for payroll salaries and wages, payroll taxes and other employee benefits for the years ended December 31, 2021 (the Company sold the Hampton Inn Property on August 31, 2021) and December 31, 2020, were $622,844 and $642,760, respectively. For the Clemson Best Western Property, total amounts incurred for payroll salaries and wages, payroll taxes and other employee benefits for the years ended December 31, 2021 and 2020, were $468,897 and $463,175, respectively. The amounts are included in hotel property operating expenses in the accompanying consolidated statements of operations. |
Rent and other receivables | Rent and other receivables Rent and other receivables include tenant receivables related to base rents and tenant reimbursements. Rent and other receivables do not include receivables attributable to recording rents on a straight-line basis, which are included in unbilled rent, discussed above. The Company determines an allowance for the uncollectible portion of accrued rents and accounts receivable based upon customer credit worthiness (including expected recovery of a claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. The Company considers a receivable past due once it becomes delinquent per the terms of the lease. A past due receivable triggers certain events such as notices, fees and other allowable and required actions per the lease. As of December 31, 2021 and 2020, the Company’s allowance for uncollectible rent totaled $13,010 and $4,693, respectively, which are comprised of amounts specifically identified based on management’s review of individual tenants’ outstanding receivables. Management determined that no additional general reserve is considered necessary as of December 31, 2021 and 2020, respectively. |
Income Taxes | Income Taxes Beginning with the Company’s taxable year ended December 31, 2017, the REIT has elected to be taxed as a real estate investment trust for federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code and applicable Treasury regulations relating to REIT qualification. In order to maintain this REIT status, the regulations require the Company to distribute at least 90% of its taxable income to shareholders and meet certain other asset and income tests, as well as other requirements. If the Company fails to qualify as a REIT, it will be subject to tax at regular corporate rates for the years in which it fails to qualify. If the Company loses its REIT status it could not elect to be taxed as a REIT for five years unless the Company’s failure to qualify was due to reasonable cause and certain other conditions were satisfied. During the years ended December 31, 2021 and 2020, respectively, the Company’s Hampton Inn TRS entity generated a tax loss, so no income tax expense was recorded. During the year ended December 31, 2021, the Company’s Clemson Best Western TRS entity generated taxable income. During the year ended December 31, 2020, the Company Clemson Best Western TRS entity generated a taxable loss. The Company believes that the net operating loss carry forward from the year ended December 31, 2020, and prior years, will offset the taxable income for the year ended December 31, 2021, so no income tax expense was recorded. Management has evaluated the effect of the guidance provided by GAAP on Accounting for Uncertainty of Income Taxes |
Use of Estimates | Use of Estimates The Company has made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and revenues and expenses during the reported period. The Company’s actual results could differ from these estimates. |
Noncontrolling Interests | Noncontrolling Interests There are three elements of noncontrolling interests in the capital structure of the Company. The ownership interests not held by the REIT are considered noncontrolling interests. Accordingly, noncontrolling interests have been reported in equity on the consolidated balance sheets but separate from the Company’s equity. On the consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. The Company’s consolidated statements of changes in stockholders’ equity includes beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity. The first noncontrolling interest is in the Hampton Inn Property. In 2017, the noncontrolling owner of the Hampton Inn Property provided $2.3 million as part of the acquisition of the Hampton Inn Property for a 36 percent tenancy in common ownership interest. The Company acquired a 64 percent tenancy in common interest through its subsidiaries. Effective on January 1, 2020, the Company entered into a transaction with the noncontrolling owner of the Hampton Inn Property by which the noncontrolling owner exchanged (i) 7.55 percent of its tenant in common interest in the Hampton Inn Property for the settlement of $867,000 in advances made by the Company to the Hampton Inn Property (of which $312,120, or 36 percent, were made on behalf of the noncontrolling owner); and (ii) 3.45 percent of its tenant in common interest in the Hampton Inn Property for 93,850 units of the Operating Partnership. As a result of this transaction, effective on January 1, 2020, the Company’s tenant-in-common interest in the Hampton Inn Property increased from 64 percent to 75 percent, and the noncontrolling owner’s tenant-in-common interest decreased from 36 percent to 25 percent. Effective on November 9, 2020, the noncontrolling owner exchanged 3 percent of its tenant in common interest in the Hampton Inn Property for the settlement of $1,021,960 in advances made by the Company to the Hampton Inn Property (of which $255,490, or 25 percent, were made on behalf of the noncontrolling owner). As a result of this transaction, the Company’s tenant-in-common interest in the Hampton Inn Property increased from 75 percent to 78 percent, and the noncontrolling owner’s tenant-in-common interest decreased from 25 percent to 22 percent. During the year ended December 31, 2021, as part of the close out of its ownership of the Hampton Inn Property, the Company reallocated $675,990 of accumulated deficit from the noncontrolling interest’s accumulated deficit to the Company’s accumulated deficit. These transactions did not have any impact on the Company’s total assets, liabilities or shareholder’s equity or total equity as of December 31, 2021 or December 31, 2020. The Hampton Inn Property’s net income (loss) is allocated to the noncontrolling ownership interest based on its percent ownership. During the year ended December 31, 2021, 22 percent of the Hampton Inn’s net income of $66,595, or $14,651, was allocated to the noncontrolling partnership interest. During the year ended December 31, 2020, a weighted average of 22.68 percent of the Hampton Inn’s net loss of $4,990,531, or $1,131,765, was allocated to the noncontrolling partnership interest. The second noncontrolling interest is in the Hanover Square Property in which the Company owns an 84 percent tenancy in common interest through its subsidiary and an outside party owns a 16 percent tenancy in common interest. The Hanover Square Property’s net loss is allocated to the noncontrolling ownership interest based on its 16 percent ownership. During the year ended December 31, 2021, 16 percent of the Hanover Square Property’s net loss of $54,888, or $8,781, was allocated to the noncontrolling ownership interest. During the year ended December 31, 2020, 16 percent of the Hanover Square Property’s net loss of $144,795, or $23,167 was allocated to the noncontrolling ownership interest. The third noncontrolling interest is in the Parkway Property in which the Company owns an 82 percent tenancy in common interest through its subsidiary and an outside party owns an 18 percent tenancy in common interest. The Parkway Property’s net loss is allocated to the noncontrolling ownership interest based on its 18 percent ownership. During the year ended December 31, 2021, 18 percent of the Parkway Property’s net loss of $21,062 or $3,791, was allocated to the noncontrolling ownership interest. Since the Company acquired the Parkway Property during the year ended December 31, 2021, no such noncontrolling interest allocation was made during the year ended December 31, 2020. The fourth noncontrolling ownership interest are the units in the Operating Partnership that are not held by the REIT. In 2017, 125,000 Operating Partnership units were issued to members of the selling LLC which owned the Hampton Inn Property who elected to participate in a 721 exchange, which allows the exchange of interests in real property for shares in a real estate investment trust. These members of the selling LLC invested $1,175,000 in the Operating Partnership in exchange for 125,000 Operating Partnership units. Additionally, as discussed above, effective on January 1, 2020, 93,850 Operating Partnership units were issued in exchange for approximately 3.45 percent of the noncontrolling owner’s tenant in common interest in the Hampton Inn Property. On August 31, 2020, a unitholder converted 5,319 Operating Partnership units into shares of Common Stock. As of December 31, 2021, there were 213,531 Operating Partnership units outstanding. The Operating Partnership units not held by the REIT represent 1.31 percent and 4.26 percent of the outstanding Operating Partnership units as of December 31, 2021 and 2020, respectively. The noncontrolling interest percentage is calculated at any point in time by dividing the number of units not owned by the Company by the total number of units outstanding. The noncontrolling interest ownership percentage will change as additional common or preferred shares are issued by the REIT, or additional Operating Partnerships units are issued or as units are exchanged for the Company’s $0.01 par value per share Common Stock. During periods when the Operating Partnership’s noncontrolling interest changes, the noncontrolling ownership interest is calculated based on the weighted average Operating Partnership noncontrolling ownership interest during that period.The Operating Partnership’s net loss is allocated to the noncontrolling unit holders based on their ownership interest. During the year ended December 31, 2021, a weighted average of 1.82 percent of the Operating Partnership’s net income of $214,333, or $3,903, was allocated to the noncontrolling unit holders. During the year ended December 31, 2020, a weighted average of 4.34 percent of the Operating Partnership’s net loss of $5,663,167, or $246,001, was allocated to the noncontrolling unit holders. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements For each of the accounting pronouncements that affect the Company, the Company has elected or plans to elect to follow the rule that allows companies engaging in an initial public offering as an Emerging Growth Company to follow the private company implementation dates. Accounting for Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842). Leases to be recorded on the balance sheets to contemplate only those variable lease payments that depend on an index or that are in substance “fixed,” (iii) a dual approach for determining whether lease expense is recognized on a straight-line or accelerated basis, depending on whether the lessee is expected to consume more than an insignificant portion of the leased asset’s economic benefits and (iv) a requirement to bifurcate certain lease and non-lease components. The lease standard was effective for public companies for fiscal years beginning after December 15, 2018 (including interim periods within those fiscal years) and for private companies, fiscal years beginning after December 15, 2019, with early adoption permitted. The FASB subsequently deferred the effective date of ASU 2016-02 for private companies by one year, to fiscal years beginning after December 15, 2020, to provide those companies with additional time to address various implementation challenges and complexities. In June 2020, the FASB further deferred the effective date due to the effects on private companies from business and capital market disruptions caused by the novel coronavirus (“COVID-19”) pandemic. ASU 2016-02 is now effective for private companies for fiscal years beginning after December 15, 2021, and for interim periods within fiscal years beginning after December 15, 2022. The Company is adopting the standard effective on January 1, 2022. The accounting for leases under which the Company is the lessor remains largely unchanged and the Company is not currently a “lessee” under any lease agreements. Management does not believe that the adoption of ASU 2016-02 will have a material impact on the Company’s consolidated financial statements. Due to the business disruptions and challenges severely affecting the global economy caused by the COVID-19 pandemic, lessors may provide rent deferrals and other lease concessions to lessees. In April 2020, the FASB staff issued a question and answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under the existing lease guidance in either ASC 840 or ASC 842 prior to the issuance of the Lease Modification Q&A, the Company would have been required to determine, on a lease-by-lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allowed the Company, based on certain criteria, to bypass the lease-by-lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. The Company elected the practical expedient and elected not to apply lease modification accounting on a lease-by-lease basis where applicable. As a result, $261,853 and $228,345 of deferred rent resulting from lease concessions due to COVID-19 is included in accounts receivable on the Company’s consolidated balance sheets as of December 31, 2021 and 2020, respectively. In addition to the deferred rent agreements granted by the Company, the Company has abated rent payments totaling $786,168 from various tenants that would have been paid from the March 2020 onset of the COVID-19 pandemic through December 31, 2021. For the years ended December 31, 2021 and 2020, respectively, abated rent revenues are as follows: Years ended December 31, 2021 2020 Rent abated $ 439,271 $ 346,897 Through December 31, 2021 2020 Cumulative rent abated $ 786,168 $ 346,897 Rent abatements granted prospectively (those granted in advance of the due date of the abated rental payments), are recorded as a reduction to retail center property revenues on the Company’s consolidated statement of operations for the periods in which the abatement was granted. Rent abatements granted retroactively (those granted for past due, unpaid rent that has already been recognized as rent revenue on the Company’s consolidated statement of operations), are recorded as a bad debt expense on the Company’s consolidated statement of operations during the period in which the abatement was retroactively granted. For the year ended December 31, 2021, bad debt expense was $39,024, and resulted from adjustments made to CAM expense reimbursements for current and prior periods that were not related to COVID-19 business disruptions. For the year ended December 31, 2020, bad debt expense was $431,143, and was related to COVID-19 business disruptions that resulted in the rent abatements granted retroactively (discussed above) and tenant bankruptcies and defaults (see “other risks and uncertainties” in Note 8, below). Projected future rent abatements are reflected as reductions of future minimum rents in Note 6, below. Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments forward-looking information to better calculate credit loss estimates. The guidance will apply to most financial assets measured at amortized cost and certain other instruments, such as accounts receivable and loans. The guidance will require that the Company estimate the lifetime expected credit loss with respect to these receivables and record allowances that, when deducted from the balance of the receivables, represent the net amounts expected to be collected. The Company will also be required to disclose information about how it developed the allowances, including changes in the factors that influenced the Company’s estimate of expected credit losses and the reasons for those changes. The Company is continuing to evaluate the impact the adoption of the guidance will have on its consolidated financial statements. Credit losses primarily arise from tenant defaults and historically have not been significant. The Company will adopt the update on the required effective date of January 1, 2023, and does not expect it to have a material impact on its consolidated financial statements. Effects of Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. Debt With Conversion Options In August 2020, the FASB issued ASU 2020-06, Debt - Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in an Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Evaluation of the Company’s Ability to Continue as a Going Concern Under the accounting guidance related to the presentation of financial statements, the Company is required to evaluate, on a quarterly basis, whether or not the entity’s current financial condition, including its sources of liquidity at the date that the consolidated financial statements are issued, will enable the entity to meet its obligations as they come due arising within one year of the date of the issuance of the Company’s consolidated financial statements and to make a determination as to whether or not it is probable, under the application of this accounting guidance, that the entity will be able to continue as a going concern. The Company’s consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In applying applicable accounting guidance, management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows, the Company’s obligations due over the next twelve months as well as the Company’s recurring business operating expenses. The Company concludes that it is probable that the Company will be able to meet its obligations arising within one year of the date of issuance of these consolidated financial statements within the parameters set forth in the accounting guidance. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Summary of impairment loss | Loss on impairment – capitalized tenant inducements $ 89,500 Loss on impairment – capitalized tenant improvements arising from acquisition cost allocation 81,860 Loss on impairment – intangible assets – leasing commissions 18,606 Loss on impairment – intangible assets – legal and marketing costs 6,281 Loss on impairment – intangible assets – leases in place 67,065 Gain on impairment – intangible liabilities – below market leases (40,215) Loss on impairment, net $ 223,097 |
Schedule of net intangible assets and liabilities | December 31, 2021 2020 Intangible Assets Leasing commissions $ 1,153,736 $ 948,427 Legal and marketing costs 163,019 86,786 Above market leases 360,509 402,895 Net leasehold asset 2,523,128 1,818,254 $ 4,200,392 $ 3,256,362 Intangible Liabilities Below market leases, net $ (1,880,612) $ (1,022,497) |
Schedule of adjustments to rental revenue related to the above and below market leases | For the year ended December 31, 2021 2020 Amortization of above market leases $ (250,504) $ (221,390) Amortization of below market leases 274,528 215,248 $ 24,024 $ (6,142) |
Schedule of amortization related to intangible assets | For the year ended December 31, 2021 2020 Leasing commissions $ (208,650) $ (178,915) Legal and marketing costs (37,441) (29,515) Net leasehold asset (847,474) (679,937) $ (1,093,565) $ (888,367) |
Schedule of future amortization of above and below market leases | 2022 2023 2024 2025 2026 2027-2040 Total Intangible Assets Leasing commissions $ 225,858 $ 180,039 $ 140,415 $ 117,224 $ 83,900 $ 406,300 $ 1,153,736 Legal and marketing costs 55,857 41,363 23,911 14,122 7,091 20,675 163,019 Above market leases 182,585 84,928 36,312 19,224 13,562 23,898 360,509 Net leasehold asset 920,572 458,836 297,023 213,034 133,627 500,036 2,523,128 $ 1,384,872 $ 765,166 $ 497,661 $ 363,604 $ 238,180 $ 950,909 $ 4,200,392 Intangible Liabilities Below market leases, net $ (356,054) $ (260,491) $ (191,865) $ (140,004) $ (107,217) $ (824,981) $ (1,880,612) |
Schedule of property and purpose of reserve | December 31, Property and Purpose of Reserve 2021 2020 Hampton Inn Property - furniture, fixtures and equipment $ — $ 18,460 Clemson Best Western Property - improvements 50,012 50,009 Clemson Best Western Property - furniture, fixtures and equipment 275,109 149,752 Franklin Square Property - leasing costs 700,000 408,278 Brookfield Center Property - maintenance reserve 92,349 48,021 Greenbrier Business Center - capital reserve 150,000 — Total $ 1,267,470 $ 674,520 |
Schedule of rent abated during the period | Years ended December 31, 2021 2020 Rent abated $ 439,271 $ 346,897 |
Schedule of cumulative rent abated | Through December 31, 2021 2020 Cumulative rent abated $ 786,168 $ 346,897 |
Investment Properties (Tables)
Investment Properties (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Schedule of investment properties | December 31, 2021 2020 (1) Land $ 14,142,555 $ 12,281,693 Site improvements 4,431,338 3,751,212 Buildings and improvements (2) 57,322,242 45,137,682 Furniture, fixtures and equipment — 825,147 Investment properties at cost (3) 75,896,135 61,995,734 Less accumulated depreciation 6,488,220 4,939,872 Investment properties, net $ 69,407,915 $ 57,055,862 (1) As of December 31, 2020, the Clemson Best Western Property is recorded as an investment property. As of December 31, 2021, the Clemson Best Western Property is recorded as an asset held for sale. Please see the note on “assets held for sale”, below. (2) Includes tenant improvements (both those acquired at the acquisition and those constructed after the acquisition), tenant inducements, capitalized leasing commissions and other capital costs incurred post-acquisition. (3) Excludes intangible assets and liabilities (see Note 2, above, for a discussion of the Company’s accounting treatment of intangible assets), escrow deposits and property reserves. |
Schedule of deferred costs, net of depreciation and amortization | December 31, 2021 2020 Capitalized tenant improvements – acquisition cost allocation, net $ 1,840,612 $ 1,155,505 Capitalized tenant improvements incurred subsequent to acquisition, net 257,340 179,919 December 31, 2021 2020 Capitalized leasing commissions, net $ 356,327 $ 346,437 |
Schedule of assets held for sale and liabilities associated with assets held for sale | December 31, 2021 2020 Investment properties, net $ 9,846,208 $ 12,410,250 Total assets held for sale $ 9,846,208 $ 12,410,250 December 31, 2021 2020 Mortgages payable, net $ 7,615,368 $ 10,352,000 Total liabilities associated with assets held for sale $ 7,615,368 $ 10,352,000 |
Schedule of operating results of the Hampton Inn Property included in continuing operations | Year ended December 31, 2021 2020 Hotel property room revenues $ 1,912,809 $ 1,697,432 Hotel property other revenues 28,274 61,250 Total Revenue 1,941,083 1,758,682 Hotel property operating expenses 1,701,451 1,755,684 Depreciation and amortization — 677,560 Total Operating Expenses 1,701,451 2,433,244 Gain on disposal of investment properties 124,641 — Operating Income (Loss) 364,273 (674,562) Interest expense 475,844 811,214 Net Loss from Operations (111,571) (1,485,776) Other income (loss) 178,166 (10,697) Net Income (Loss) 66,595 (1,496,473) Net income (loss) attributable to Hampton Inn Property noncontrolling interests 14,651 (1,131,765) Net Income (Loss) Attributable to Medalist Common Shareholders $ 51,944 $ (364,708) |
Brookfield Center Property. | |
Schedule of fair values of assets acquired and liabilities assumed | Lancer Greenbrier Center Business Center Parkway Property Property Property Total Fair value of assets acquired Investment property (a) $ 9,902,876 $ 6,896,803 $ 7,277,036 $ 24,076,715 Lease intangibles and other assets (b) 1,023,753 583,940 472,288 2,079,981 Restricted cash acquired (c) — 150,000 — 150,000 Above market leases (b) 157,438 48,186 2,494 208,118 Below market leases (b) (878,682) (100,167) (153,794) (1,132,643) Preliminary fair value of net assets acquired (d) $ 10,205,385 $ 7,578,762 $ 7,598,024 $ 25,382,171 Purchase consideration Consideration paid with cash (e) $ 3,783,515 $ 3,097,162 $ 2,138,795 $ 9,019,472 Consideration paid by noncontrolling owner (f) — — 469,492 469,492 Consideration paid with new mortgage debt, net (g) 6,421,870 — 4,989,737 11,411,607 Consideration paid with assumed mortgage debt, net (h) — 4,481,600 — 4,481,600 Preliminary total consideration (i) $ 10,205,385 $ 7,578,762 $ 7,598,024 $ 25,382,171 a. Represents the fair value of the investment property acquired which includes land, buildings, site improvements, tenant improvements and furniture, fixtures and equipment. The fair value was determined using the market approach, the cost approach, the income approach or a combination thereof. Closing and acquisition costs were allocated and added to the fair value of the tangible assets acquired. b. Represents the fair value of lease intangibles and other assets. Lease intangibles include leasing commissions, leases in place, above market leases, below market leases and legal and marketing costs associated with replacing existing leases. c. Represents an operating reserve funded by the Company at closing. d. Represents the total fair value of assets and liabilities acquired at closing. e. Represents cash paid at closing and cash paid for acquisition (including intangible assets), and closing costs paid at closing or directly by the Company outside of closing. f. Represents cash paid at closing by the noncontrolling owner. In addition to cash paid at closing, the noncontrolling owner provided $34,508 directly to the operating entity for working capital purposes. g. Issuance of new mortgage debt to fund the purchase of the Lancer Center Property , net of capitalized loan issuance costs. See Note 5, below. h. Assumption of mortgage debt related to the purchase of the Greenbrier Business Center Property. See Note 5, below. i. Represents the consideration paid for the fair value of the assets and liabilities acquired. |
Mandatorily Redeemable Prefer_2
Mandatorily Redeemable Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Mandatorily Redeemable Preferred Stock | |
Schedule of mandatorily redeemable preferred stock | For all periods the mandatorily redeemable preferred stock has been outstanding, the Company has paid a cash dividend on the stock equal to 8 percent per annum, paid quarterly, as follows: Amount Payment Date Record Date per share For the period April 27, 2020 April 24, 2020 $ 0.37 February 19, 2020 - April 27, 2020 July 24, 2020 July 22, 2020 0.50 April 28, 2020 - July 24, 2020 October 26, 2020 October 23, 2020 0.50 July 25, 2020 - October 26, 2020 February 1, 2021 January 29, 2021 0.50 October 27, 2020 - February 1, 2021 April 30, 2021 April 26, 2021 0.50 February 2, 2021 – April 30, 2021 July 26, 2021 July 12, 2021 0.50 May 1, 2021 - July 26, 2021 October 27, 2021 October 25, 2021 0.50 July 27, 2021 – October 26, 2021 January 20, 2022 January 13, 2022 0.50 October 27, 2021 – January 19, 2022 |
Loans Payable (Tables)
Loans Payable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Loans Payable | |
Schedule of mortgages payables, net | Monthly Interest December 31, Property Payment Rate Maturity 2021 2020 Franklin Square (a) Interest only 3.808 % December 2031 $ 13,250,000 $ 14,275,000 Hanover Square (b) $ 56,882 4.25 % December 2027 10,134,667 10,380,791 Ashley Plaza (c) $ 52,795 3.75 % September 2029 11,127,111 11,349,518 Clemson Best Western (d) Interest only Variable October 2022 — 7,750,000 Brookfield Center (e) $ 22,876 3.90 % November 2029 4,758,344 4,842,887 Lancer Center (f) $ 34,667 4.00 % March 2026 6,488,034 — Greenbrier Business Center (g) Interest only 4.00 % July 2026 4,495,000 — Parkway Center (h) Variable Variable October 2026 5,090,210 — Unamortized issuance costs, net (825,544) (503,842) Total mortgages payable, net $ 54,517,822 $ 48,094,354 (a) The original mortgage loan for the Franklin Square Property in the amount of $14,275,000 matured on October 6, 2021. Effective on October 6, 2021, the Company entered into a forbearance agreement with the current lender extending the maturity date for thirty days with a right to extend the maturity date for an additional thirty days. On November 8, 2021, the Company closed on a new loan in the principal amount of $13,250,000 with a ten-year term and a maturity date of December 6, 2031. In addition to the funds from the new loan, the Company used $2,242,273 in cash on hand for loan issuance costs (totaling $283,721 ), to fund escrows and to repay the remaining balance of the original mortgage loan. The Company has guaranteed the payment and performance of the obligations of the new mortgage loan. The new mortgage loan bears interest at a fixed rate of 3.808 percent and is interest only until January 6, 2025, at which time the monthly payment will become $61,800 , which includes interest and principal based on a 30 year amortization schedule. The Company accounted for this refinancing transaction in accordance with debt extinguishment accounting in accordance with ASC 470. The new mortgage includes covenants for the Company to maintain a net worth of $13,250,000 , excluding the assets and liabilities associated with the Franklin Square Property and for the Company to maintain liquid assets of no less than $1,000,000 . As of December 31, 2021, the Company believes that it is compliant with these covenants. (b) On May 8, 2020, the Company entered into a refinancing transaction with the mortgage lender for the Hanover Square Property which increased the mortgage amount and reduced the interest rate. Under this transaction, the principal amount of the loan was increased to $10,500,000 and the interest rate reduced to a fixed rate of 4.25 percent until January 1, 2023, when the interest rate will adjust to a new fixed rate which will be determined by adding 3.00 percentage points to the daily average yield on United States Treasury securities adjusted to a constant maturity of five years , as made available by the Federal Reserve Board, with a minimum of 4.25 percent. The fixed monthly payment, which includes principal and interest, increased to $56,882 . The Company accounted for this transaction as a loan modification in accordance with ASC 470. The mortgage loan agreement for the Hanover Square property includes covenants to (i) maintain a Debt Service Coverage Ratio (“DSCR”) in excess of 1.35 and (ii) maintain a loan-to-value of real estate ratio of 75 percent. As of December 31, 2021 and 2020, respectively, the Company believes that it is compliant with these covenants. (c) The mortgage loan for the Ashley Plaza Property bears interest at a fixed rate of 3.75 percent and was interest only for the first twelve months. Beginning on October 1, 2020, the monthly payment became $52,795 for the remaining term of the loan, which includes interest at the fixed rate, and principal, based on a thirty year amortization schedule. (d) As of March 31, 2021, the Company reclassified the mortgage loan for the Clemson Best Western Property to mortgages payable, net, associated with assets held for sale (see below). (e) The mortgage loan for the Brookfield Property bears interest at a fixed rate of 3.90 percent and is interest only for the first twelve months. Beginning on November 1, 2020, the monthly payment became $22,876 for the remaining term of the loan, which includes interest at the fixed rate, and principal, based on a thirty year amortization schedule. (f) The mortgage loan for the Lancer Center Property bears interest at a fixed rate of 4.00 percent. The monthly payment is $34,667 which includes interest at the fixed rate and principal, based on a twenty-five year amortization schedule. The Company has provided a guaranty of the payment of and performance under the terms of the Lancer Center Property mortgage. (g) The Company assumed the mortgage loan for the Greenbrier Business Center Property from the seller. The mortgage loan bears interest at a fixed rate of 4.00 percent and is interest only until August 1, 2022, at which time the monthly payment will become $23,873 , which includes interest at the fixed rate, and principal, based on a twenty-five year amortization schedule. The Greenbrier Business Center Property mortgage includes covenants to maintain a debt service coverage ratio above 1.35 to 1.00 and maintain an occupancy rate of at least 80 percent. As of December 31, 2021, the Company believes that it is compliant with these covenants. (h) The mortgage loan for the Parkway Property bears interest at a variable rate based on LIBOR with a minimum rate of 2.25 percent. The interest rate payable is the ICE LIBOR rate plus 225 basis points . As of December 31, 2021, the rate in effect for the Parkway Property mortgage was 2.3493 percent. The monthly payment, which varies based on the interest rate in effect each month, includes interest at the variable rate, and principal based on a 30 year amortization schedule. Mortgages payable, net, associated with assets held for sale The Company’s mortgages payables, net, associated with assets held for sale, consists of the following: Monthly Interest December 31, Property Payment Rate Maturity 2021 2020 Hampton Inn (a) Interest only Variable May 2022 $ — $ 10,400,000 Clemson Best Western (b) Interest only Variable October 2022 7,750,000 — Unamortized issuance costs, net (134,632) (48,000) Total mortgages payable, net, associated with assets held for sale $ 7,615,368 $ 10,352,000 (a) As of December 31, 2020, the Company reclassified the mortgage loan for the Hampton Inn Property to mortgages payable, net, associated with assets held for sale. On August 31, 2021, the Company repaid the loan as part of the sale of the Hampton Inn Property. The mortgage loan for the Hampton Inn Property bore interest at a variable rate based on LIBOR with a minimum rate of 6.50 percent. The interest rate payable is the USD LIBOR one-month rate plus 6.25 percent. As of August 31, 2021 (the date of the mortgage loan repayment) and December 31, 2020, the rate in effect for the Hampton Inn Property mortgage was 6.50 percent and 6.50 percent, respectively. (b) As of March 31, 2021, the Company reclassified the mortgage loan for the Clemson Best Western Property to mortgages payable, net, associated with assets held for sale. The mortgage loan for the Clemson Best Western Property bears interest at a variable rate based on LIBOR with a minimum rate of 7.15 percent. The interest rate payable is the USD LIBOR one-month rate plus 4.9 percent. As of December 31, 2021 and 2020, respectively, the rate in effect for the Clemson Best Western Property mortgage was 7.15 percent. The mortgage payable on the Clemson Best Western Property matures on October 6, 2022. The Company has an option to extend the term of the mortgage by one year, until October 6, 2023, under certain conditions. If the Company has not been successful in its efforts to sell the Clemson Best Western Property by the loan maturity date, the Company plans to exercise the option to extend the term of the mortgage. |
Schedule of convertible debentures | Debt Principal Issuance Net Cash Tranche Closing Date Amount Discount Costs – Cash Proceeds Tranche 1 October 27, 2020 $ 1,500,000 $ (75,000) $ (155,555) $ 1,269,445 Tranche 2 December 22, 2020 2,000,000 (100,000) (207,407) 1,692,593 Tranche 3 January 5, 2021 1,500,000 (75,000) (155,555) 1,269,445 Total $ 5,000,000 $ 250,000 $ 518,517 $ 4,231,483 Accrued and Principal Unpaid Total Common Amount Interest Conversion Conversion Shares Conversion Date Converted Converted Amount Price Issued January 6, 2021 $ 100,000 $ 411 $ 100,411 $ 1.9079 52,629 January 14, 2021 200,000 1,534 201,534 1.9079 105,631 January 15, 2021 300,000 164 300,164 1.9079 157,327 January 21, 2021 300,000 740 300,740 2.0060 149,920 January 26, 2021 500,000 411 500,411 2.0060 249,457 February 9, 2021 100,000 192 100,192 2.0078 49,901 February 9, 2021 400,000 13,699 413,699 2.0078 206,046 February 10, 2021 500,000 219 500,219 2.0078 249,138 February 17, 2021 200,000 1,055 201,055 2.0193 99,567 March 10, 2021 400,000 2,589 402,589 1.5637 257,459 March 11, 2021 250,000 69 250,069 1.5637 159,921 March 12, 2021 250,000 34 250,034 1.5637 159,899 March 12, 2021 250,000 28,151 278,151 1.5637 177,880 April 28, 2021 250,000 8,048 258,048 1.1007 234,440 May 3, 2021 250,000 685 250,685 1.1007 227,750 May 10, 2021 250,000 719 250,719 1.1641 215,376 May 11, 2021 500,000 68 500,068 1.1641 429,575 Total Conversions $ 5,000,000 $ 58,788 $ 5,058,788 3,181,916 |
Schedule of interest expense, including amortization of capitalized issuance costs and payments received from the Company's interest rate protection transactions for the Hampton Inn Property and Clemson Best Western Property | Interest expense, including amortization of capitalized issuance costs consists of the following: For the year ended December 31, 2021 Amortization Mortgage of discounts Other Interest and capitalized interest Expense issuance costs expense Total Franklin Square $ 720,003 $ 9,325 $ — $ 729,328 Hanover Square 438,931 12,902 — 451,833 Hampton Inn 456,300 9,000 10,544 475,844 Ashley Plaza 427,280 17,431 — 444,711 Clemson Best Western 561,821 22,437 6,688 590,946 Brookfield Center 189,685 11,352 — 201,037 Lancer Center 166,026 17,971 — 183,997 Greenbrier Business Center 63,429 924 — 64,353 Parkway Center 19,895 1,838 — 21,733 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 204,383 400,000 604,383 Amortization and interest on convertible debentures — 1,718,487 42,486 1,760,973 Line of credit, short term — — 3,118 3,118 Other interest — — 1,999 1,999 Total interest expense $ 3,043,370 $ 2,026,050 $ 464,835 $ 5,534,255 For the year ended December 31, 2020 Amortization Mortgage of discounts and Other Interest capitalized interest Expense issuance costs expense Total Franklin Square $ 682,105 $ 16,237 $ — $ 698,342 Hanover Square 433,007 12,868 — 445,875 Hampton Inn 674,331 122,310 14,573 811,214 Ashley Plaza 434,305 17,436 — 451,741 Clemson Best Western 563,360 89,748 9,168 662,276 Brookfield Center 192,281 11,352 — 203,633 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 162,375 344,444 506,819 Amortization and interest on convertible debentures — 119,870 16,301 136,171 Line of credit, short term — 10,000 26,699 36,699 Related party notes payable, short term — — 5,835 5,835 Other interest — — 2,021 2,021 Total interest expense $ 2,979,389 $ 562,196 $ 419,041 $ 3,960,626 |
Schedule of interest accrued and accumulated amortization of capitalized issuance costs | As of December 31, 2021 As of December 31, 2020 Accumulated Accumulated amortization of amortization capitalized Accrued of capitalized Accrued interest issuance costs interest issuance costs Franklin Square $ — $ 2,364 $ 57,774 $ 65,710 Hanover Square 38,287 46,990 35,820 34,088 Hampton Inn — — 58,211 424,691 Ashley Plaza — 40,679 36,649 23,248 Clemson Best Western 47,716 134,622 47,716 112,185 Brookfield Center 15,979 25,542 16,264 14,190 Lancer Center 22,042 17,971 — — Greenbrier Business Center 15,482 924 — — Parkway Center 9,966 1,838 — — Amortization and accrued preferred stock dividends (1) on mandatorily redeemable preferred stock 70,004 366,758 70,004 162,375 Amortization and interest on convertible debentures — — 16,301 119,870 Line of credit, short term — — 732 — Total $ 219,476 $ 637,688 $ 339,471 $ 956,357 (1) Recorded as accrued interest under accounts payable and accrued liabilities on the Company’s consolidated balance sheets as of December 31, 2021 and 2020, respectively. |
Schedule of principal repayments on indebtedness | The Company’s scheduled principal repayments on indebtedness as of December 31, 2021 are as follows: Mortgages Payable Associated Mortgages With Assets Payable Held for Sale Total 2022 $ 872,925 $ 7,750,000 $ 8,622,925 2023 969,781 — 969,781 2024 1,003,349 — 1,003,349 2025 1,281,071 — 1,281,071 2026 10,948,516 — 10,948,516 Thereafter 40,267,724 — 40,267,724 Total principal payments and debt maturities 55,343,366 7,750,000 63,093,366 Less unamortized issuance costs (825,544) (134,632) (960,176) Net principal payments and debt maturities $ 54,517,822 $ 7,615,368 $ 62,133,190 |
Rentals under Operating Leases
Rentals under Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Rentals under Operating Leases | |
Schedule of future minimum rentals to be received under noncancelable tenant operating leases | 2022 $ 6,550,881 2023 5,703,181 2024 4,489,189 2025 3,746,300 2026 2,601,115 Thereafter 3,927,880 Total minimum rents $ 27,018,546 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity | |
Schedule of earnings per common share | Year ended December 31, 2021 2020 Basic and diluted shares outstanding Weighted average Common Shares – basic 13,092,937 4,709,980 Effect of conversion of operating partnership units 213,531 119,681 Effect of conversion of convertible debentures (1) — 1,843,022 Weighted average Common Shares – diluted 13,306,468 6,672,683 Calculation of earnings per share – basic and diluted Net loss attributable to common shareholders $ (4,364,264) $ (8,180,609) Weighted average Common Shares – basic and diluted 13,092,937 4,709,980 Loss per share – basic and diluted $ (0.33) $ (1.74) (1) Represents the number of shares that would be issued if all outstanding convertible debentures and accrued interest were converted into CommonShares on December 31, 2020 at a price equal to 88 percent of the lowest volume weighted average price for the prior 10 trading days, or $1.9079 pershare. |
Schedule of dividends and distributions to noncontrolling interests paid | Year ended December 31, 2021 2020 Common shareholders (dividends) $ 642,105 $ 562,537 Hampton Inn Property noncontrolling interest (distribution) 466,258 — Hanover Square Property noncontrolling interest (distributions) 34,400 327,840 Operating Partnership unit holders (distributions) 8,541 27,356 Total dividends and distributions $ 1,151,304 $ 917,733 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Schedule of rent deferral and deferral repayments | Rent Deferrals Rent Deferral Repayments Year ended Year ended Number December 31, December 31, of Total Total Tenants 2020 2021 Deferrals 2021 2022 2023 Repayments Franklin Square 1 $ 56,250 $ — $ — $ — $ 53,581 $ 2,669 $ 56,250 Hanover Square 1 26,833 — — 26,833 — — 26,833 Ashley Plaza — — — — — — — — Brookfield Center 1 145,262 81,773 81,773 — 227,035 — 227,035 Total 3 $ 228,345 $ 81,773 $ 81,773 $ 26,833 $ 280,616 $ 2,669 $ 310,118 |
Schedule of rent abatement | Rent Abatements For the year ended December 31, Number of Total Rent Tenants 2020 2021 2022 Abated Franklin Square 2 $ 204,721 $ 334,871 $ 139,530 $ 679,122 Hanover Square 2 71,971 104,400 34,800 211,171 Ashley Plaza 2 70,205 — — 70,205 Brookfield Center — — — — — Total 6 $ 346,897 $ 439,271 $ 174,330 $ 960,498 |
Schedule of rent reductions and additional rental income | Rent Losses and Reductions Due to Bankruptcies, Bankruptcy Restructuring and Tenant Default Number Year ended December 31, Total Rent of Tenants 2020 2021 2022 2023 2024 2025 Reductions Franklin Square 1 $ 77,898 $ 113,688 $ 113,688 $ 113,688 $ 113,688 $ 75,792 $ 608,442 Hanover Square 1 14,563 — — — — — 14,563 Ashley Plaza 1 77,653 53,760 22,760 7,300 — — 161,473 Brookfield Center — — — — — — — — Total 3 $ 170,114 $ 167,448 $ 136,448 $ 120,988 $ 113,688 $ 75,792 $ 784,478 In return for (i) granting abatements and (ii) restructuring the lease of the tenant under bankruptcy protection, the Company received lease extension agreements of between one and five years, resulting in additional future rents payable under these leases as follows. These amounts are included in future minimum rents in Note 6, above, and summarized in the following table. Additional Rent Under Term Extensions (1) For the year ended December 31, 2022 2023 2024 2025 Thereafter Total Franklin Square $ 161,849 $ 277,456 $ 333,039 $ 360,830 $ 111,165 $ 1,244,339 Hanover Square 242,069 259,306 76,550 — — 577,925 Ashley Plaza — 124,993 125,000 128,333 744,858 1,123,184 Total $ 403,918 $ 661,755 $ 534,589 $ 489,163 $ 856,023 $ 2,945,448 (1) Excludes future rent payments based on tenant’s monthly sales revenues. |
Schedule of operating statistics | Operating statistics for the years ended December 31, 2021, 2020 and 2019, for the Hampton Inn Property were as follows: Occupancy Average Daily Rate Hampton Inn Property 2021 2020 2019 2021 2020 2019 January 47.8 % 41.6 % 43.9 % $ 72.85 $ 100.41 $ 94.57 February 68.3 % 72.0 % 51.9 % 81.74 102.73 105.15 March 51.8 % 33.3 % 64.1 % 94.10 106.98 109.11 April 56.3 % 25.7 % 62.3 % 93.46 65.15 149.33 May 66.1 % 41.5 % 55.8 % 102.11 67.87 111.37 June 70.4 % 49.6 % 72.1 % 126.38 73.40 103.89 July 80.5 % 65.1 % 60.8 % 104.80 71.34 110.57 August 69.5 % 50.3 % 75.7 % 101.92 77.73 107.29 September (1) N/A % 59.8 % 65.0 % N/A 80.27 105.22 October N/A % 41.8 % 75.0 % N/A 99.43 160.01 November N/A % 28.8 % 66.6 % N/A 83.02 106.43 December N/A % 24.4 % 48.7 % N/A 75.67 99.43 Full Year N/A % 44.4 % 60.6 % N/A $ 84.10 $ 113.41 (1) The Company sold the Hampton Inn Property on August 31, 2021. Accordingly, no statistical data is presented for periods after the sale or for the full year ending December 31, 2021. Operating statistics for the years ended December 31, 2021, 2020 and 2019, for the Clemson Best Western Hotel Property were as follows: Occupancy Average Daily Rate Clemson Best Western Property 2021 2020 2019 (1) 2021 2020 2019 (1) January 100.0 % 24.8 % 27.4 % $ 55.13 $ 77.04 $ 98.10 February 100.0 % 31.9 % 34.8 % 58.83 94.07 92.03 March 100.0 % 26.7 % 67.3 % 59.05 90.58 92.61 April 100.0 % 24.5 % 47.4 % 59.00 68.97 103.92 May 100.0 % 19.9 % 37.5 % 42.23 61.54 109.69 June 100.0 % 24.0 % 38.4 % 39.00 61.24 93.80 July 100.0 % 22.7 % 31.6 % 39.00 56.13 85.34 August 100.0 % 27.0 % 47.2 % 48.03 64.35 111.60 September 100.0 % 65.0 % 38.5 % 59.00 67.59 161.11 October 100.0 % 100.0 % 38.3 % 59.00 58.99 143.35 November 100.0 % 100.0 % 39.3 % 59.00 58.48 121.87 December 100.0 % 99.7 % 28.4 % 19.00 26.94 83.12 Full Year 100.0 % 47.2 % 34.9 % 49.57 $ 59.08 $ 118.64 (1) January through August 2019 data for the Clemson Best Western Property is from the prior owner. September 2019 data is from the September 2019 STR report for the Clemson Best Western Property. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Information | |
Schedule of property operating revenues, expenses and NOI by product type | The following table presents property operating revenues, expenses and NOI by product type: For the year ended December 31, Hotel properties Retail center properties Flex center property Total 2021 2020 2021 2020 2021 2020 2021 2020 Revenues $ 4,635,331 $ 3,337,176 $ 5,634,396 $ 5,152,150 $ 1,202,822 $ 786,834 $ 11,472,549 $ 9,276,160 Operating expenses 3,102,951 3,164,646 1,518,973 1,362,532 343,717 231,209 4,965,641 4,758,387 Bad debt expense — — 38,346 431,143 678 — 39,024 431,143 Net operating income $ 1,532,380 $ 172,530 $ 4,077,077 $ 3,358,475 $ 858,427 $ 555,625 $ 6,467,884 $ 4,086,630 |
Organization and Basis of Pre_2
Organization and Basis of Presentation and Consolidations (Details) | 12 Months Ended | |||||
Dec. 31, 2021ft²aroom | Aug. 27, 2021ft² | Dec. 31, 2020 | Nov. 09, 2020 | Jan. 01, 2020 | Dec. 31, 2017 | |
Greenbrier Business Center Property | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 89,290 | 89,290 | ||||
Lancer Center Shopping Center | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 178,626 | |||||
Franklin Square Property | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 134,239 | |||||
Hanover Square Property | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 73,440 | |||||
Percentage by parent | 84.00% | |||||
Ownership percentage by noncontrolling owners | 16.00% | |||||
Ashley Plaza Property | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 160,356 | |||||
Brookfield Center Property | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 64,880 | |||||
Hampton Inn Property | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Percentage by parent | 78.00% | 75.00% | 64.00% | |||
Ownership percentage by noncontrolling owners | 22.00% | 25.00% | 25.00% | 25.00% | 36.00% | |
Clemson Best Western University Inn | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Number of hotel rooms | room | 148 | |||||
Area of land | a | 5.92 | |||||
Parkway Property | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 64,109 | |||||
Percentage by parent | 82.00% | |||||
Ownership percentage by noncontrolling owners | 18.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Loss on impairment (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Loss on impairment - capitalized tenant inducements | $ 89,500 |
Loss on impairment - capitalized tenant improvements arising from acquisition cost allocation | 81,860 |
Gain on impairment - intangible liabilities - below market leases | (40,215) |
Loss on impairment, net | 223,097 |
Leasing commissions | |
Loss on impairment - intangible assets | 18,606 |
Legal and marketing costs | |
Loss on impairment - intangible assets | 6,281 |
Net leasehold asset | |
Loss on impairment - intangible assets | $ 67,065 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Net Intangible Assets and Liabilities (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Intangible Assets | ||
Net intangible assets | $ 4,200,392 | $ 3,256,362 |
Intangible Liabilities | ||
Below market leases, net | (1,880,612) | (1,022,497) |
Leasing commissions | ||
Intangible Assets | ||
Net intangible assets | 1,153,736 | 948,427 |
Legal and marketing costs | ||
Intangible Assets | ||
Net intangible assets | 163,019 | 86,786 |
Above market leases | ||
Intangible Assets | ||
Net intangible assets | 360,509 | 402,895 |
Net leasehold asset | ||
Intangible Assets | ||
Net intangible assets | $ 2,523,128 | $ 1,818,254 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Rental Revenue Related to Above and Below Market Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ (1,093,565) | $ (888,367) |
Amortization of below market leases | 274,528 | 215,248 |
Amortization of above and below market leases | 24,024 | (6,142) |
Above market leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ (250,504) | $ (221,390) |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Amortization Related to Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ (1,093,565) | $ (888,367) |
Leasing commissions | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | 208,650 | 178,915 |
Legal and marketing costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | 37,441 | 29,515 |
Net leasehold asset | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 847,474 | $ 679,937 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Future Amortization of Above and Below Market Leases (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Intangible Assets | ||
2022 | $ 1,384,872 | |
2023 | 765,166 | |
2024 | 497,661 | |
2025 | 363,604 | |
2026 | 238,180 | |
2027 - 2040 | 950,909 | |
Intangible assets, net | 4,200,392 | $ 3,256,362 |
Intangible Liabilities | ||
2022 | (356,054) | |
2023 | (260,491) | |
2024 | (191,865) | |
2025 | (140,004) | |
2026 | (107,217) | |
2027-2040 | (824,981) | |
Below market leases, net | (1,880,612) | (1,022,497) |
Leasing commissions | ||
Intangible Assets | ||
2022 | 225,858 | |
2023 | 180,039 | |
2024 | 140,415 | |
2025 | 117,224 | |
2026 | 83,900 | |
2027 - 2040 | 406,300 | |
Intangible assets, net | 1,153,736 | 948,427 |
Legal and marketing costs | ||
Intangible Assets | ||
2022 | 55,857 | |
2023 | 41,363 | |
2024 | 23,911 | |
2025 | 14,122 | |
2026 | 7,091 | |
2027 - 2040 | 20,675 | |
Intangible assets, net | 163,019 | 86,786 |
Above market leases | ||
Intangible Assets | ||
2022 | 182,585 | |
2023 | 84,928 | |
2024 | 36,312 | |
2025 | 19,224 | |
2026 | 13,562 | |
2027 - 2040 | 23,898 | |
Intangible assets, net | 360,509 | 402,895 |
Net leasehold asset | ||
Intangible Assets | ||
2022 | 920,572 | |
2023 | 458,836 | |
2024 | 297,023 | |
2025 | 213,034 | |
2026 | 133,627 | |
2027 - 2040 | 500,036 | |
Intangible assets, net | $ 2,523,128 | $ 1,818,254 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Investment Properties (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Real Estate [Line Items] | ||
Accumulated amortization of lease origination costs, leases in place and legal and marketing costs | $ 2,779,370 | $ 2,353,103 |
Buildings and improvements | Maximum | ||
Real Estate [Line Items] | ||
Estimated useful life of asset | 42 years | |
Buildings and improvements | Minimum | ||
Real Estate [Line Items] | ||
Estimated useful life of asset | 5 years | |
Franklin Square Property | ||
Real Estate [Line Items] | ||
Loss on impairment - intangible assets | $ 51,737 | $ 223,097 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Exceeded the FDIC limit | $ 2,377,633 | $ 1,719,233 |
Escrow deposits | 1,523,837 | 1,352,723 |
Capital property reserves | 1,267,470 | 674,520 |
Security deposits | 222,265 | 109,059 |
Mandatorily redeemable preferred stock | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Escrow deposits | 371,111 | |
Preferred dividend escrow | 0 | $ 97,632 |
UNITED STATES | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
FDIC Limit, per account | $ 250,000 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Property and Purpose of Reserves (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Capital property reserves | $ 1,267,470 | $ 674,520 |
Hampton Inn Property | Furniture, fixtures and equipment | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Capital property reserves | 18,460 | |
Clemson Best Western Property | Improvements [Member] | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Capital property reserves | 50,012 | 50,009 |
Clemson Best Western Property | Furniture, fixtures and equipment | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Capital property reserves | 275,109 | 149,752 |
Franklin Square Property | Leasing costs [Member] | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Capital property reserves | 700,000 | 408,278 |
Brookfield Center Property. | Maintenance reserve [Member] | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Capital property reserves | 92,349 | $ 48,021 |
Greenbrier Business Center Property | Capital reserve [Member] | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Capital property reserves | $ 150,000 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Abated Rent Payments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
Rent abated | $ 439,271 | $ 346,897 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Unbilled rent | $ 872,322 | $ 673,728 |
Revenues | 11,472,549 | 9,276,160 |
Termination fee income | 0 | 0 |
Franklin Square Property | ||
Disaggregation of Revenue [Line Items] | ||
Termination fee income | 200,000 | |
CAM reimbursements | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 113,493 | $ 14,934 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Projected Future Rent Abatement (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Line Items] | ||
Cumulative rent abated | $ 786,168 | $ 346,897 |
2020 | ||
Accounting Policies [Line Items] | ||
Cumulative rent abated | $ 786,168 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Additional Information (Details) | Nov. 09, 2020USD ($) | Aug. 31, 2020shares | Jun. 30, 2020USD ($) | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)shares | Dec. 31, 2017USD ($)itemPartnership | Jan. 01, 2020 |
Accounting Policies [Line Items] | |||||||
Impairment of assets held for sale | $ 3,494,058 | ||||||
Allowance for uncollectible tenant receivables | $ 13,010 | 4,693 | |||||
Percentage of income distributed to shareholders | 90.00% | ||||||
Income tax expense | $ 0 | ||||||
Tenant in common interest exchanged, settlement in advances | $ 867,000 | $ 867,000 | |||||
Tenant in common interest exchanged for operating partnership units (as a percent) | 3.45% | 3.45% | |||||
Net income (loss) | $ 214,333 | $ 5,663,167 | |||||
Noncontrolling Operating Partnership Units | 125,000 | ||||||
Number of participate elected for exchange | item | 721 | ||||||
Investment cost | $ 1,175,000 | ||||||
Percentage of outstanding operating partnership units | 1.82% | 4.34% | |||||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | ||||||
Net income (loss) attributable to Operating Partnership noncontrolling interests | $ 3,903 | $ (246,001) | |||||
Deferred rent | 81,773 | ||||||
Bad debt expense | $ 18,750 | 39,024 | 34,556 | ||||
Bad debt expenses related to covid -19 | 431,143 | ||||||
Principal amount of debentures converted to common stock | $ 2,260,565 | ||||||
Common Stock | |||||||
Accounting Policies [Line Items] | |||||||
Operating partnership unit conversion (in shares) | shares | 5,319 | ||||||
2020 | |||||||
Accounting Policies [Line Items] | |||||||
Deferred rent | 228,345 | ||||||
Accounts receivable | |||||||
Accounting Policies [Line Items] | |||||||
Deferred rent | 261,853 | $ 228,345 | |||||
Hampton Inn Property | |||||||
Accounting Policies [Line Items] | |||||||
Amounts incurred for payroll salaries and wages, payroll taxes and other employee benefits | 622,844 | 642,760 | |||||
Percentage of noncontrolling owner exchanged percent of its tenant in common interest | 3 | ||||||
Tenant in common interest exchanged, settlement in advances | $ 1,021,960 | ||||||
Tenant in common interest exchanged, settlement in advances 36 percent | $ 255,490 | 312,120 | |||||
Net income (loss) | 144,795 | ||||||
Net loss (income) attributable to noncontrolling interests | 14,651 | (1,131,765) | |||||
Hanover Square Property | |||||||
Accounting Policies [Line Items] | |||||||
Net income (loss) | 54,888 | ||||||
Net loss (income) attributable to noncontrolling interests | (8,781) | (23,167) | |||||
Hanover Square Property | 2020 | |||||||
Accounting Policies [Line Items] | |||||||
Deferred rent | 26,833 | ||||||
Clemson Best Western Property | |||||||
Accounting Policies [Line Items] | |||||||
Amounts incurred for payroll salaries and wages, payroll taxes and other employee benefits | 468,897 | 463,175 | |||||
Parkway Property | |||||||
Accounting Policies [Line Items] | |||||||
Net income (loss) | 21,062 | ||||||
Net loss (income) attributable to noncontrolling interests | $ (3,791) | $ 0 | |||||
Medalist Diversified Real Estate Investment Trust, Inc. ("REIT") | |||||||
Accounting Policies [Line Items] | |||||||
Percentage of outstanding operating partnership units | 1.31% | 4.26% | |||||
Hampton Inn Property | |||||||
Accounting Policies [Line Items] | |||||||
Proceeds from acquisition | $ 2,300,000 | ||||||
Tenant in common interest exchanged for settlement in advances (as a percent) | 7.55% | ||||||
Tenant in common interest exchanged for operating partnership units (as a percent) | 3.45% | ||||||
Tenant in common interest exchanged, operating partnership units issued (in shares) | shares | 93,850 | ||||||
Percentage by parent | 78.00% | 75.00% | 64.00% | ||||
Ownership percentage by noncontrolling owners | 25.00% | 22.00% | 25.00% | 36.00% | 25.00% | ||
Net income (loss) | $ 66,595 | $ 4,990,531 | |||||
Percentage of outstanding operating partnership units | 22.00% | ||||||
Operating partnership unit conversion (in shares) | shares | 5,319 | ||||||
Operating Partnership units outstanding | shares | 213,531 | ||||||
Percentage on income (Loss) from Continuing Operations, Net of Tax, Attributable to Noncontrolling Interest | 22.68 | ||||||
Net loss (income) attributable to noncontrolling interests | $ 14,651 | $ 1,131,765 | |||||
Transfer of accumulated deficit balance from NCI to entity | $ 675,990 | ||||||
Hanover Square Property | |||||||
Accounting Policies [Line Items] | |||||||
Percentage by parent | 84.00% | ||||||
Ownership percentage by noncontrolling owners | 16.00% | ||||||
Net loss (income) attributable to noncontrolling interests | $ (8,781) | ||||||
Parkway Property | |||||||
Accounting Policies [Line Items] | |||||||
Percentage by parent | 82.00% | ||||||
Ownership percentage by noncontrolling owners | 18.00% | ||||||
Parkway Property | Common Stock | |||||||
Accounting Policies [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 18.00% |
Investment Properties - Investm
Investment Properties - Investment Properties (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Real Estate [Line Items] | ||
Investment properties at cost | $ 75,896,135 | $ 61,995,734 |
Less accumulated depreciation | 6,488,220 | 4,939,872 |
Investment properties, net | 69,407,915 | 57,055,862 |
Land | ||
Real Estate [Line Items] | ||
Investment properties at cost | 14,142,555 | 12,281,693 |
Site improvements | ||
Real Estate [Line Items] | ||
Investment properties at cost | 4,431,338 | 3,751,212 |
Buildings and improvements | ||
Real Estate [Line Items] | ||
Investment properties at cost | $ 57,322,242 | 45,137,682 |
Furniture, fixtures and equipment | ||
Real Estate [Line Items] | ||
Investment properties at cost | $ 825,147 |
Investment Properties - Deferre
Investment Properties - Deferred costs, net of depreciation (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Capitalized leasing commissions, net | $ 356,327 | $ 346,437 |
Capitalized tenant improvements - acquisition cost allocation, net | ||
Capitalized tenant improvements, net | 1,840,612 | 1,155,505 |
Capitalized tenant improvements incurred subsequent to acquisition, net | ||
Capitalized tenant improvements, net | $ 257,340 | $ 179,919 |
Investment Properties - Additio
Investment Properties - Additional Information (Details) | Nov. 01, 2021USD ($)ft² | Aug. 27, 2021USD ($)ft² | May 14, 2021USD ($) | Dec. 31, 2021USD ($)ft² | Dec. 31, 2020USD ($) | Aug. 30, 2019ft² |
Real Estate [Line Items] | ||||||
Depreciation | $ 2,415,139 | $ 3,067,556 | ||||
Capitalized Tenant Improvements | 143,079 | 60,000 | ||||
Capitalized Leasing Commissions | 75,304 | 56,746 | ||||
Depreciation on capitalized leasing commissions | 65,414 | 49,578 | ||||
Amortization Of Tenant Inducements | 7,100 | |||||
Cash provided by a non-controlling investor | 34,508 | |||||
Additional escrows funded | $ 1,523,837 | 1,352,723 | ||||
PMI Parkway, LLC [Member] | ||||||
Real Estate [Line Items] | ||||||
Noncontrolling ownership percentage | 18.00% | |||||
Lancer Center Property | ||||||
Real Estate [Line Items] | ||||||
Area Of Building | ft² | 178,626 | |||||
Purchase price of property | $ 10,100,000 | |||||
Credits for major repairs | 200,000 | |||||
Acquisition and closing costs, escrows and lease buy-out fees | 305,385 | |||||
Total investment | 10,205,385 | |||||
Loan issuance costs | $ 143,130 | |||||
Percentage of property leased | 100.00% | |||||
Investment property | ||||||
Real Estate [Line Items] | ||||||
Depreciation | $ 2,415,139 | $ 3,067,556 | ||||
Greenbrier Business Center Property | ||||||
Real Estate [Line Items] | ||||||
Area Of Building | ft² | 89,290 | 89,290 | ||||
Purchase price of property | $ 7,250,000 | |||||
Acquisition and closing costs, escrows and lease buy-out fees | 178,763 | |||||
Total investment | 7,578,762 | |||||
Loan issuance costs | $ 13,400 | |||||
Percentage of property leased | 86.80% | |||||
Parkway Property | ||||||
Real Estate [Line Items] | ||||||
Cash from an unaffiliated NCI purchaser | $ 469,492 | |||||
Area Of Building | ft² | 64,109 | |||||
Purchase price of property | $ 7,300,000 | |||||
Acquisition and closing costs, escrows and lease buy-out fees | 298,024 | |||||
Net mortgage loan proceeds | 4,989,737 | |||||
Total investment | 7,598,024 | |||||
Loan issuance costs | 110,263 | |||||
Cash provided | $ 2,138,795 | |||||
Property occupied percentage | 100.00% | |||||
Percentage of property leased | 100.00% | |||||
Parkway Property | PMI Parkway, LLC [Member] | ||||||
Real Estate [Line Items] | ||||||
Ownership percentage | 82.00% |
Investment Properties - Assets
Investment Properties - Assets held for sale and liabilities associated with assets held for sale (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Long Lived Assets Held-for-sale [Line Items] | ||
Total assets held for sale | $ 9,846,208 | $ 12,410,250 |
Total liabilities associated with assets held for sale | 7,615,368 | 10,352,000 |
Mortgages payable, net, associated with assets held for sale | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Total liabilities associated with assets held for sale | 7,615,368 | 10,352,000 |
Investment properties | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Total assets held for sale | $ 9,846,208 | $ 12,410,250 |
Investment Properties - Propert
Investment Properties - Property (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Real Estate [Line Items] | ||
Depreciation expense | $ 2,415,139 | $ 3,067,556 |
Capitalized tenant improvements | 143,079 | 60,000 |
Loss on impairment - capitalized tenant improvements arising from acquisition cost allocation | 81,860 | |
Capitalized leasing commissions | 75,304 | 56,746 |
Depreciation on capitalized leasing commissions | 65,414 | 49,578 |
Impairment of assets held for sale | 3,494,058 | |
Investment property | ||
Real Estate [Line Items] | ||
Depreciation expense | 2,415,139 | 3,067,556 |
Franklin Square Property | ||
Real Estate [Line Items] | ||
Loss on impairment - capitalized tenant improvements arising from acquisition cost allocation | 0 | |
Capitalized tenant improvements incurred subsequent to acquisition, net | ||
Real Estate [Line Items] | ||
Depreciation on capitalized tenant improvements | 65,658 | 45,843 |
Capitalized tenant improvements - acquisition cost allocation, net | ||
Real Estate [Line Items] | ||
Depreciation on capitalized tenant improvements | $ 371,714 | $ 267,118 |
Investment Properties - Sale of
Investment Properties - Sale of investment property (Details) - USD ($) | Aug. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Real Estate [Line Items] | |||
Gain on disposal of investment properties | $ 124,641 | $ 0 | |
Hampton Inn Property | |||
Real Estate [Line Items] | |||
Proceeds from sale of property | $ 12,900,000 | ||
Gain on disposal of investment properties | $ 124,641 |
Investment Properties - Fair va
Investment Properties - Fair values of the assets acquired and liabilities (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Fair value of assets acquired | |
Below market leases | $ (1,132,643) |
Preliminary fair value of net assets acquired | 25,382,171 |
Purchase consideration | |
Consideration paid with cash | 9,019,472 |
Consideration paid by noncontrolling owner | 469,492 |
Consideration paid with new mortgage debt, net | 11,411,607 |
Consideration paid with assumed mortgage debt, net | 4,481,600 |
Preliminary total consideration | 25,382,171 |
Lancer Center Property | |
Fair value of assets acquired | |
Below market leases | (878,682) |
Preliminary fair value of net assets acquired | 10,205,385 |
Purchase consideration | |
Consideration paid with cash | 3,783,515 |
Consideration paid with new mortgage debt, net | 6,421,870 |
Preliminary total consideration | 10,205,385 |
Greenbrier Business Center Property | |
Fair value of assets acquired | |
Below market leases | (100,167) |
Preliminary fair value of net assets acquired | 7,578,762 |
Purchase consideration | |
Consideration paid with cash | 3,097,162 |
Consideration paid with assumed mortgage debt, net | 4,481,600 |
Preliminary total consideration | 7,578,762 |
Parkway Property | |
Fair value of assets acquired | |
Below market leases | (153,794) |
Preliminary fair value of net assets acquired | 7,598,024 |
Purchase consideration | |
Consideration paid with cash | 2,138,795 |
Consideration paid by noncontrolling owner | 469,492 |
Consideration paid with new mortgage debt, net | 4,989,737 |
Preliminary total consideration | 7,598,024 |
Investment property | |
Fair value of assets acquired | |
Preliminary fair value of net assets acquired | 24,076,715 |
Investment property | Lancer Center Property | |
Fair value of assets acquired | |
Preliminary fair value of net assets acquired | 9,902,876 |
Investment property | Greenbrier Business Center Property | |
Fair value of assets acquired | |
Preliminary fair value of net assets acquired | 6,896,803 |
Investment property | Parkway Property | |
Fair value of assets acquired | |
Preliminary fair value of net assets acquired | 7,277,036 |
Lease intangibles and other assets | |
Fair value of assets acquired | |
Preliminary fair value of net assets acquired | 2,079,981 |
Lease intangibles and other assets | Lancer Center Property | |
Fair value of assets acquired | |
Preliminary fair value of net assets acquired | 1,023,753 |
Lease intangibles and other assets | Greenbrier Business Center Property | |
Fair value of assets acquired | |
Preliminary fair value of net assets acquired | 583,940 |
Lease intangibles and other assets | Parkway Property | |
Fair value of assets acquired | |
Preliminary fair value of net assets acquired | 472,288 |
Restricted cash created | |
Fair value of assets acquired | |
Preliminary fair value of net assets acquired | 150,000 |
Restricted cash created | Greenbrier Business Center Property | |
Fair value of assets acquired | |
Preliminary fair value of net assets acquired | 150,000 |
Above market leases | |
Fair value of assets acquired | |
Preliminary fair value of net assets acquired | 208,118 |
Above market leases | Lancer Center Property | |
Fair value of assets acquired | |
Preliminary fair value of net assets acquired | 157,438 |
Above market leases | Greenbrier Business Center Property | |
Fair value of assets acquired | |
Preliminary fair value of net assets acquired | 48,186 |
Above market leases | Parkway Property | |
Fair value of assets acquired | |
Preliminary fair value of net assets acquired | $ 2,494 |
Investment Properties - Addit_2
Investment Properties - Additional Information of other property (Details) | Aug. 27, 2021USD ($)ft² | May 14, 2021USD ($) | Dec. 31, 2021ft² | Aug. 30, 2019ft² |
Lancer Center Property | ||||
Business Acquisition [Line Items] | ||||
Area of building | ft² | 178,626 | |||
Property leased percentage | 100.00% | |||
Purchase price of property | $ 10,100,000 | |||
Credits for major repairs | 200,000 | |||
Total investment | 10,205,385 | |||
Loan issuance costs | 143,130 | |||
Acquisition and closing costs, escrows and lease buy-out fees | $ 305,385 | |||
Greenbrier Business Center Property | ||||
Business Acquisition [Line Items] | ||||
Area of building | ft² | 89,290 | 89,290 | ||
Property leased percentage | 86.80% | |||
Purchase price of property | $ 7,250,000 | |||
Total investment | 7,578,762 | |||
Loan issuance costs | 13,400 | |||
Acquisition and closing costs, escrows and lease buy-out fees | $ 178,763 |
Investment Properties - Sale _2
Investment Properties - Sale of investment property - Operating results (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Real Estate [Line Items] | ||
Total Revenue | $ 11,472,549 | $ 9,276,160 |
Hotel property operating expenses | 3,102,951 | 3,164,646 |
Depreciation and amortization | 3,508,704 | 3,981,874 |
Total Operating Expenses | 10,782,686 | 15,018,058 |
Gain on disposal of investment properties | 124,641 | 0 |
Operating income (loss) | 814,504 | (5,741,898) |
Interest expense | 5,534,255 | 3,960,626 |
Net Loss from Operations | (4,719,751) | (9,702,524) |
Other (loss) income | 361,469 | 120,982 |
Net Loss | (4,358,282) | (9,581,542) |
Net Loss Attributable to Medalist Common Shareholders | (4,364,264) | (8,180,609) |
Hotel property room revenues | ||
Real Estate [Line Items] | ||
Total Revenue | 4,590,372 | 3,207,405 |
Hotel property other revenues | ||
Real Estate [Line Items] | ||
Total Revenue | 44,959 | 129,771 |
Hampton Inn Property | ||
Real Estate [Line Items] | ||
Total Revenue | 1,941,083 | 1,758,682 |
Hotel property operating expenses | 1,701,451 | 1,755,684 |
Depreciation and amortization | 677,560 | |
Total Operating Expenses | 1,701,451 | 2,433,244 |
Gain on disposal of investment properties | 124,641 | |
Operating income (loss) | 364,273 | (674,562) |
Interest expense | 475,844 | 811,214 |
Net Loss from Operations | (111,571) | (1,485,776) |
Other (loss) income | 178,166 | (10,697) |
Net Income (Loss) | 66,595 | (1,496,473) |
Net loss (income) attributable to noncontrolling interests | 14,651 | (1,131,765) |
Net Loss Attributable to Medalist Common Shareholders | 51,944 | (364,708) |
Hampton Inn Property | Hotel property room revenues | ||
Real Estate [Line Items] | ||
Total Revenue | 1,912,809 | 1,697,432 |
Hampton Inn Property | Hotel property other revenues | ||
Real Estate [Line Items] | ||
Total Revenue | $ 28,274 | $ 61,250 |
Mandatorily Redeemable Prefer_3
Mandatorily Redeemable Preferred Stock (Details) | Jan. 20, 2022$ / shares | Oct. 27, 2021$ / shares | Jul. 26, 2021$ / shares | Apr. 30, 2021$ / shares | Apr. 13, 2021shares | Feb. 01, 2021$ / shares | Oct. 26, 2020$ / shares | Jul. 24, 2020$ / shares | Apr. 27, 2020$ / shares | Feb. 19, 2020USD ($)period$ / sharesshares | Dec. 31, 2021USD ($)$ / shares | Dec. 31, 2020USD ($) |
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||||||||||
Shares issued | shares | 8,000,000 | |||||||||||
Net proceeds of the convertible preferred stock | $ 3,860,882 | |||||||||||
Mandatorily redeemable preferred stock | ||||||||||||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||||||||||
Shares issued | shares | 200,000 | |||||||||||
Preferred Stock, dividend rate (as a percent) | 8.00% | 8.00% | ||||||||||
Shares issued, price per share (in dollars per share) | $ / shares | $ 23 | $ 23 | ||||||||||
Gross proceeds | $ 4,600,000 | |||||||||||
Net proceeds of the convertible preferred stock | 3,860,882 | |||||||||||
Preferred dividend escrow | $ 0 | 97,632 | ||||||||||
Aggregate liquidation preference | $ 5,000,000 | |||||||||||
Defaulted dividend payment quarterly periods, number | period | 6 | |||||||||||
Number of additional directors, who can be elected | 2 | |||||||||||
Dividends paid (in dollars per share) | $ / shares | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.37 | ||||
Accrued but unpaid dividends | $ 70,004 | 70,004 | ||||||||||
Discount on stock issued (in dollars per share) | $ / shares | $ 2 | |||||||||||
Discount on stock issued | $ 400,000 | |||||||||||
Discount on stock issued, amortization period | 5 years | |||||||||||
Legal Fees | $ 739,118 | |||||||||||
Amortization of the discount and deferred financing costs | $ 204,383 | 162,375 | ||||||||||
Accumulated amortization of the discount and deferred financing costs | $ 366,758 | $ 162,375 |
Loans Payable - Mortgages Payab
Loans Payable - Mortgages Payables, Net (Details) - USD ($) | May 08, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Loans Payable | |||
Monthly Payment | The new mortgage loan bears interest at a fixed rate of 3.808 percent and is interest only until January 6, 2025, at which time the monthly payment will become $61,800, which includes interest and principal based on a 30 year amortization schedule. | ||
Unamortized issuance costs, net | $ (960,176) | ||
Total mortgages payable, net | 62,133,190 | ||
Mortgages Payable | |||
Loans Payable | |||
Interest Rate | 4.25 | ||
Unamortized issuance costs, net | (825,544) | $ (503,842) | |
Total mortgages payable, net | $ 54,517,822 | 48,094,354 | |
Franklin Square Property | Mortgages Payable | |||
Loans Payable | |||
Monthly Payment | Interest only | ||
Interest Rate | 3.808% | ||
Maturity | December 2031 | ||
Mortgages payable | $ 13,250,000 | 14,275,000 | |
Hanover Square Property | |||
Loans Payable | |||
Monthly Payment | $ 56,882 | ||
Interest Rate | 4.25% | ||
Mortgages payable | $ 10,500,000 | ||
Hanover Square Property | Mortgages Payable | |||
Loans Payable | |||
Monthly Payment | $ 56,882 | ||
Interest Rate | 4.25% | ||
Maturity | December 2027 | ||
Mortgages payable | $ 10,134,667 | 10,380,791 | |
Ashley Plaza Property | |||
Loans Payable | |||
Monthly Payment | $ 52,795 | ||
Interest Rate | 3.75% | ||
Ashley Plaza Property | Mortgages Payable | |||
Loans Payable | |||
Monthly Payment | $ 52,795 | ||
Interest Rate | 3.75% | ||
Maturity | September 2029 | ||
Mortgages payable | $ 11,127,111 | 11,349,518 | |
Clemson Best Western Property | Mortgages Payable | |||
Loans Payable | |||
Monthly Payment | Interest only | ||
Interest Rate | Variable | ||
Maturity | October 2022 | ||
Mortgages payable | 7,750,000 | ||
Brookfield Center Property. | |||
Loans Payable | |||
Monthly Payment | $ 22,876 | ||
Interest Rate | 3.90% | ||
Brookfield Center Property. | Mortgages Payable | |||
Loans Payable | |||
Monthly Payment | $ 22,876 | ||
Interest Rate | 3.90% | ||
Maturity | November 2029 | ||
Mortgages payable | $ 4,758,344 | $ 4,842,887 | |
Lancer Center Property | Mortgages Payable | |||
Loans Payable | |||
Monthly Payment | $ 34,667 | ||
Interest Rate | 4.00% | ||
Maturity | March 2026 | ||
Mortgages payable | $ 6,488,034 | ||
Greenbrier Business Center Property | |||
Loans Payable | |||
Monthly Payment | $ 23,873 | ||
Interest Rate | 4.00% | ||
Greenbrier Business Center Property | Mortgages Payable | |||
Loans Payable | |||
Monthly Payment | Interest only | ||
Interest Rate | 4.00% | ||
Maturity | July 2026 | ||
Mortgages payable | $ 4,495,000 | ||
Parkway Property | Mortgages Payable | |||
Loans Payable | |||
Monthly Payment | Variable | ||
Interest Rate | Variable | ||
Maturity | October 2026 | ||
Mortgages payable | $ 5,090,210 |
Loans Payable - Assets held for
Loans Payable - Assets held for sale (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Monthly Payment | The new mortgage loan bears interest at a fixed rate of 3.808 percent and is interest only until January 6, 2025, at which time the monthly payment will become $61,800, which includes interest and principal based on a 30 year amortization schedule. | |
Unamortized issuance costs, net | $ (960,176) | |
Total mortgages payable, net, associated with assets held for sale | 7,615,368 | $ 10,352,000 |
Mortgages payable, net, associated with assets held for sale | ||
Debt Instrument [Line Items] | ||
Unamortized issuance costs, net | (134,632) | (48,000) |
Total mortgages payable, net, associated with assets held for sale | $ 7,615,368 | 10,352,000 |
Mortgages payable, net, associated with assets held for sale | Hampton Inn Property | ||
Debt Instrument [Line Items] | ||
Monthly Payment | Interest only | |
Interest Rate | Variable | |
Maturity | May 2022 | |
Mortgage Payable Gross | $ 10,400,000 | |
Mortgages payable, net, associated with assets held for sale | Clemson Best Western Property | ||
Debt Instrument [Line Items] | ||
Monthly Payment | Interest only | |
Interest Rate | Variable | |
Maturity | October 2022 | |
Mortgage Payable Gross | $ 7,750,000 |
Loans Payable - Convertible deb
Loans Payable - Convertible debenture (Details) - USD ($) | Jan. 05, 2021 | Oct. 27, 2020 | Oct. 22, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 08, 2021 | Oct. 06, 2021 | Dec. 22, 2020 |
Debt Instrument [Line Items] | ||||||||
Principal Amount | $ 13,250,000 | $ 14,275,000 | ||||||
Net Proceeds | $ 1,305,000 | $ 2,926,483 | ||||||
Payment of debt issuance costs in common shares | $ 123,000 | $ 123,000 | ||||||
Convertible Debentures | ||||||||
Debt Instrument [Line Items] | ||||||||
Discount rate | 5.00% | 5.00% | ||||||
Accrue interest rate | 5.00% | |||||||
Principal Amount | $ 5,000,000 | $ 5,000,000 | ||||||
Discount | 250,000 | |||||||
Debt Issuance Costs - Cash | 518,517 | |||||||
Net Proceeds | 4,231,483 | |||||||
Beneficial conversion feature | $ 946,840 | |||||||
Debt Instrument, Term | 1 year | |||||||
Tranche 1 | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal Amount | 1,500,000 | |||||||
Discount | (75,000) | |||||||
Debt Issuance Costs - Cash | (155,555) | |||||||
Net Proceeds | $ 1,269,445 | |||||||
Tranche 2 | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal Amount | $ 2,000,000 | $ 2,000,000 | ||||||
Discount | (100,000) | |||||||
Debt Issuance Costs - Cash | (207,407) | |||||||
Net Proceeds | $ 1,692,593 | |||||||
Tranche 3 | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal Amount | $ 1,500,000 | |||||||
Discount | (75,000) | |||||||
Debt Issuance Costs - Cash | (155,555) | |||||||
Net Proceeds | $ 1,269,445 |
Loans Payable - Convertible (De
Loans Payable - Convertible (Details) | May 11, 2021USD ($)$ / sharesshares | May 10, 2021USD ($)$ / sharesshares | May 03, 2021USD ($)$ / sharesshares | Apr. 28, 2021USD ($)$ / sharesshares | Mar. 12, 2021USD ($)$ / sharesshares | Mar. 11, 2021USD ($)$ / sharesshares | Mar. 10, 2021USD ($)$ / sharesshares | Feb. 17, 2021USD ($)$ / sharesshares | Feb. 10, 2021USD ($)$ / sharesshares | Feb. 09, 2021USD ($)$ / sharesshares | Jan. 26, 2021USD ($)$ / sharesshares | Jan. 21, 2021USD ($)$ / sharesshares | Jan. 15, 2021USD ($)$ / sharesshares | Jan. 14, 2021USD ($)$ / sharesshares | Jan. 06, 2021USD ($)$ / sharesshares | Jan. 05, 2021USD ($) | Oct. 27, 2020USD ($) | Oct. 22, 2020USD ($) | Dec. 31, 2021USD ($)D$ / sharesshares | Dec. 31, 2020USD ($)$ / shares | Nov. 08, 2021USD ($) | Oct. 06, 2021USD ($) | Dec. 22, 2020USD ($) |
Debt Instrument [Line Items] | |||||||||||||||||||||||
Net proceeds | $ 1,305,000 | $ 2,926,483 | |||||||||||||||||||||
Principal Amount | $ 13,250,000 | $ 14,275,000 | |||||||||||||||||||||
Debt Issuance Costs - Stock | (123,000) | (123,000) | |||||||||||||||||||||
Amortization expense | 1,718,487 | 119,870 | |||||||||||||||||||||
Total Conversion Amount | 2,260,565 | ||||||||||||||||||||||
Convertible Debentures | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Net proceeds | 4,231,483 | ||||||||||||||||||||||
Principal Amount | $ 5,000,000 | 5,000,000 | |||||||||||||||||||||
Debt Issuance Costs - Cash | (518,517) | ||||||||||||||||||||||
Beneficial conversion feature | (946,840) | ||||||||||||||||||||||
Carrying amount | $ 0 | $ 2,260,565 | |||||||||||||||||||||
Number of consecutive trading days | D | 10 | ||||||||||||||||||||||
Redemption premium | 15.00% | ||||||||||||||||||||||
Number of business days | D | 10 | ||||||||||||||||||||||
Accrued and Principal Amount Converted | $ 500,000 | $ 250,000 | $ 250,000 | $ 250,000 | $ 250,000 | $ 400,000 | $ 200,000 | $ 500,000 | $ 500,000 | $ 300,000 | $ 300,000 | $ 200,000 | $ 100,000 | $ 5,000,000 | |||||||||
Unpaid Interest Converted | 68 | 719 | 685 | 8,048 | 69 | 2,589 | 1,055 | 219 | 411 | 740 | 164 | 1,534 | 411 | 58,788 | |||||||||
Total Conversion Amount | $ 500,068 | $ 250,719 | $ 250,685 | $ 258,048 | $ 250,069 | $ 402,589 | $ 201,055 | $ 500,219 | $ 500,411 | $ 300,740 | $ 300,164 | $ 201,534 | $ 100,411 | $ 5,058,788 | |||||||||
Common Conversion Price | $ / shares | $ 1.1641 | $ 1.1641 | $ 1.1007 | $ 1.1007 | $ 1.5637 | $ 1.5637 | $ 2.0193 | $ 2.0078 | $ 2.0060 | $ 2.0060 | $ 1.9079 | $ 1.9079 | $ 1.9079 | $ 1.59 | $ 2.47 | ||||||||
Shares Issued | shares | 429,575 | 215,376 | 227,750 | 234,440 | 159,921 | 257,459 | 99,567 | 249,138 | 249,457 | 149,920 | 157,327 | 105,631 | 52,629 | 3,181,916 | |||||||||
Convertible Debentures | Minimum | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Common Conversion Price | $ / shares | $ 0.6175 | ||||||||||||||||||||||
Tranche 1 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Net proceeds | 1,269,445 | ||||||||||||||||||||||
Principal Amount | 1,500,000 | ||||||||||||||||||||||
Discount | $ (75,000) | ||||||||||||||||||||||
Accrued and Principal Amount Converted | $ 250,000 | $ 100,000 | |||||||||||||||||||||
Unpaid Interest Converted | 34 | 192 | |||||||||||||||||||||
Total Conversion Amount | $ 250,034 | $ 100,192 | |||||||||||||||||||||
Common Conversion Price | $ / shares | $ 1.5637 | $ 2.0078 | |||||||||||||||||||||
Shares Issued | shares | 159,899 | 49,901 | |||||||||||||||||||||
Tranche 2 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Net proceeds | $ 1,692,593 | ||||||||||||||||||||||
Principal Amount | 2,000,000 | $ 2,000,000 | |||||||||||||||||||||
Discount | $ (100,000) | ||||||||||||||||||||||
Accrued and Principal Amount Converted | $ 250,000 | $ 400,000 | |||||||||||||||||||||
Unpaid Interest Converted | 28,151 | 13,699 | |||||||||||||||||||||
Total Conversion Amount | $ 278,151 | $ 413,699 | |||||||||||||||||||||
Common Conversion Price | $ / shares | $ 1.5637 | $ 2.0078 | |||||||||||||||||||||
Shares Issued | shares | 177,880 | 206,046 | |||||||||||||||||||||
Tranche 3 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Net proceeds | $ 1,269,445 | ||||||||||||||||||||||
Principal Amount | 1,500,000 | ||||||||||||||||||||||
Discount | $ (75,000) |
Loans Payable - Interest expens
Loans Payable - Interest expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | $ 3,043,370 | $ 2,979,389 |
Amortization of discounts and capitalized issuance costs | 2,026,050 | 562,196 |
Other interest expense | 464,835 | 419,041 |
Total interest expense | 5,534,255 | 3,960,626 |
Amortization and preferred stock dividends on mandatorily redeemable preferred stock | ||
Debt Instrument [Line Items] | ||
Amortization of discounts and capitalized issuance costs | 204,383 | 162,375 |
Other interest expense | 400,000 | 344,444 |
Total interest expense | 604,383 | 506,819 |
Amortization and interest on convertible debentures | ||
Debt Instrument [Line Items] | ||
Amortization of discounts and capitalized issuance costs | 1,718,487 | |
Other interest expense | 42,486 | 16,301 |
Total interest expense | 1,760,973 | 136,171 |
Line of credit, short term | ||
Debt Instrument [Line Items] | ||
Amortization of discounts and capitalized issuance costs | 10,000 | |
Other interest expense | 3,118 | 26,699 |
Total interest expense | 3,118 | 36,699 |
Related Party Notes Payable Short Term | ||
Debt Instrument [Line Items] | ||
Other interest expense | 5,835 | |
Total interest expense | 5,835 | |
Other interest | ||
Debt Instrument [Line Items] | ||
Other interest expense | 1,999 | 2,021 |
Total interest expense | 1,999 | 2,021 |
Preferred Stock | Amortization and interest on convertible debentures | ||
Debt Instrument [Line Items] | ||
Amortization of discounts and capitalized issuance costs | 119,870 | |
Franklin Square Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 720,003 | 682,105 |
Amortization of discounts and capitalized issuance costs | 9,325 | 16,237 |
Total interest expense | 729,328 | 698,342 |
Hanover Square Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 438,931 | 433,007 |
Amortization of discounts and capitalized issuance costs | 12,902 | 12,868 |
Total interest expense | 451,833 | 445,875 |
Hampton Inn Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 456,300 | 674,331 |
Amortization of discounts and capitalized issuance costs | 9,000 | 122,310 |
Other interest expense | 10,544 | 14,573 |
Total interest expense | 475,844 | 811,214 |
Ashley Plaza Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 427,280 | 434,305 |
Amortization of discounts and capitalized issuance costs | 17,431 | 17,436 |
Total interest expense | 444,711 | 451,741 |
Clemson Best Western Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 561,821 | 563,360 |
Amortization of discounts and capitalized issuance costs | 22,437 | 89,748 |
Other interest expense | 6,688 | 9,168 |
Total interest expense | 590,946 | 662,276 |
Brookfield Center Property. | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 189,685 | 192,281 |
Amortization of discounts and capitalized issuance costs | 11,352 | 11,352 |
Total interest expense | 201,037 | $ 203,633 |
Lancer Centers Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 166,026 | |
Amortization of discounts and capitalized issuance costs | 17,971 | |
Total interest expense | 183,997 | |
Greenbrier Business Center Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 63,429 | |
Amortization of discounts and capitalized issuance costs | 924 | |
Total interest expense | 64,353 | |
Parkway Center | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 19,895 | |
Total interest expense | 21,733 | |
Parkway Center | Preferred Stock | Amortization and preferred stock dividends on mandatorily redeemable preferred stock | ||
Debt Instrument [Line Items] | ||
Amortization of discounts and capitalized issuance costs | $ 1,838 |
Loans Payable - Interest accrue
Loans Payable - Interest accrued and accumulated amortization of capitalized issuance costs (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Accrued interest | $ 219,476 | $ 339,471 |
Accumulated amortization of capitalized issuance costs | 637,688 | 956,357 |
Amortization and preferred stock dividends on mandatorily redeemable preferred stock | ||
Debt Instrument [Line Items] | ||
Accrued interest | 70,004 | 70,004 |
Accumulated amortization of capitalized issuance costs | 366,758 | 162,375 |
Amortization and interest on convertible debentures | ||
Debt Instrument [Line Items] | ||
Accrued interest | 16,301 | |
Accumulated amortization of capitalized issuance costs | 119,870 | |
Line of credit, short term | ||
Debt Instrument [Line Items] | ||
Accrued interest | 732 | |
Franklin Square Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 57,774 | |
Accumulated amortization of capitalized issuance costs | 2,364 | 65,710 |
Hanover Square Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 38,287 | 35,820 |
Accumulated amortization of capitalized issuance costs | 46,990 | 34,088 |
Hampton Inn Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 58,211 | |
Accumulated amortization of capitalized issuance costs | 424,691 | |
Ashley Plaza Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 36,649 | |
Accumulated amortization of capitalized issuance costs | 40,679 | 23,248 |
Clemson Best Western Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 47,716 | 47,716 |
Accumulated amortization of capitalized issuance costs | 134,622 | 112,185 |
Brookfield Center Property. | ||
Debt Instrument [Line Items] | ||
Accrued interest | 15,979 | 16,264 |
Accumulated amortization of capitalized issuance costs | 25,542 | $ 14,190 |
Lancers Center Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 22,042 | |
Accumulated amortization of capitalized issuance costs | 17,971 | |
Greenbrier Business Center Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 15,482 | |
Accumulated amortization of capitalized issuance costs | 924 | |
Parkway Center | ||
Debt Instrument [Line Items] | ||
Accrued interest | 9,966 | |
Accumulated amortization of capitalized issuance costs | $ 1,838 |
Loans Payable - Principal Repay
Loans Payable - Principal Repayments on Indebtedness (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
2022 | $ 8,622,925 | |
2023 | 969,781 | |
2024 | 1,003,349 | |
2025 | 1,281,071 | |
2026 | 10,948,516 | |
Thereafter | 40,267,724 | |
Total principal payments and debt maturities | 63,093,366 | |
Less unamortized issuance costs | 960,176 | |
Total mortgages payable, net | 62,133,190 | |
Mortgages Payable | ||
Debt Instrument [Line Items] | ||
2022 | 872,925 | |
2023 | 969,781 | |
2024 | 1,003,349 | |
2025 | 1,281,071 | |
2026 | 10,948,516 | |
Thereafter | 40,267,724 | |
Total principal payments and debt maturities | 55,343,366 | |
Less unamortized issuance costs | 825,544 | $ 503,842 |
Total mortgages payable, net | 54,517,822 | 48,094,354 |
Mortgages payable, net, associated with assets held for sale | ||
Debt Instrument [Line Items] | ||
2022 | 7,750,000 | |
Total principal payments and debt maturities | 7,750,000 | |
Less unamortized issuance costs | 134,632 | $ 48,000 |
Total mortgages payable, net | $ 7,615,368 |
Loans Payable - Additional Info
Loans Payable - Additional Information (Details) - USD ($) | Nov. 08, 2021 | Oct. 06, 2021 | May 08, 2020 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 27, 2020 |
Debt Instrument [Line Items] | |||||||
Mortgages payables | $ 62,133,190 | ||||||
Net worth to be maintained by the entity (excluding mortgaged property's assets and liabilities) | $ 13,250,000 | ||||||
Notes payable outstanding | $ 176,300 | ||||||
Principal Amount | $ 13,250,000 | $ 14,275,000 | |||||
Cash | 4,370,405 | 2,862,994 | |||||
Amortization schedule of the mortgage loan | 30 years | ||||||
Loan issuance costs | $ 2,242,273 | $ 283,721 | |||||
Minimum liquid assets to be maintained | $ 1,000,000 | ||||||
Monthly payments till January 6, 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Fixed interest rate | 3.808% | ||||||
Fixed monthly payment including principal and interest | $ 61,800 | ||||||
Mortgages Payable | |||||||
Debt Instrument [Line Items] | |||||||
Mortgages payables | 54,517,822 | 48,094,354 | |||||
Mortgages payable, net, associated with assets held for sale | |||||||
Debt Instrument [Line Items] | |||||||
Mortgages payables | $ 7,615,368 | ||||||
Franklin Square Property | Mortgages Payable | |||||||
Debt Instrument [Line Items] | |||||||
Fixed interest rate | 3.808% | ||||||
Refinance with new mortgage payable | $ 13,250,000 | 14,275,000 | |||||
Hampton Inn Property | SBA PPP Loan Program | |||||||
Debt Instrument [Line Items] | |||||||
Fixed monthly payment including principal and interest | 1,978 | ||||||
Notes payable outstanding | $ 0 | $ 176,300 | |||||
Hampton Inn Property | Mortgages payable, net, associated with assets held for sale | |||||||
Debt Instrument [Line Items] | |||||||
Description of interest rate | LIBOR with a minimum rate of 6.50 percent | ||||||
Description of interest rate payable | LIBOR one-month rate plus 6.25 percent | ||||||
Percentage of rate in effect on property | 6.50% | 6.50% | |||||
Refinance with new mortgage payable | $ 10,400,000 | ||||||
Hanover Square Property | |||||||
Debt Instrument [Line Items] | |||||||
Fixed interest rate | 4.25% | ||||||
Basis spread on variable rate | 3.00% | ||||||
Constant maturity | 5 years | ||||||
Debt service coverage ratio | excess of 1.35 | ||||||
Loan-to-value of real estate ratio | 75.00% | ||||||
Refinance with new mortgage payable | $ 10,500,000 | ||||||
Fixed monthly payment including principal and interest | $ 56,882 | ||||||
Hanover Square Property | Mortgages Payable | |||||||
Debt Instrument [Line Items] | |||||||
Fixed interest rate | 4.25% | ||||||
Refinance with new mortgage payable | $ 10,134,667 | 10,380,791 | |||||
Fixed monthly payment including principal and interest | $ 56,882 | ||||||
Ashley Plaza Property | |||||||
Debt Instrument [Line Items] | |||||||
Fixed interest rate | 3.75% | ||||||
Fixed monthly payment including principal and interest | $ 52,795 | ||||||
Ashley Plaza Property | Mortgages Payable | |||||||
Debt Instrument [Line Items] | |||||||
Fixed interest rate | 3.75% | ||||||
Refinance with new mortgage payable | $ 11,127,111 | 11,349,518 | |||||
Fixed monthly payment including principal and interest | $ 52,795 | ||||||
Clemson Best Western Property | Mortgages Payable | |||||||
Debt Instrument [Line Items] | |||||||
Refinance with new mortgage payable | $ 7,750,000 | ||||||
Clemson Best Western Property | Mortgages payable, net, associated with assets held for sale | |||||||
Debt Instrument [Line Items] | |||||||
Description of interest rate | LIBOR with a minimum rate of 7.15 percent | ||||||
Description of interest rate payable | LIBOR one-month rate plus 4.9 percent | ||||||
Percentage of rate in effect on property | 7.15% | 7.15% | |||||
Refinance with new mortgage payable | $ 7,750,000 | ||||||
Lancers Center Property | |||||||
Debt Instrument [Line Items] | |||||||
Fixed interest rate | 4.00% | ||||||
Fixed monthly payment including principal and interest | $ 34,667 | ||||||
Brookfield Center Property. | |||||||
Debt Instrument [Line Items] | |||||||
Fixed interest rate | 3.90% | ||||||
Fixed monthly payment including principal and interest | $ 22,876 | ||||||
Brookfield Center Property. | Mortgages Payable | |||||||
Debt Instrument [Line Items] | |||||||
Fixed interest rate | 3.90% | ||||||
Refinance with new mortgage payable | $ 4,758,344 | $ 4,842,887 | |||||
Fixed monthly payment including principal and interest | $ 22,876 | ||||||
Greenbrier Business Center Property | |||||||
Debt Instrument [Line Items] | |||||||
Fixed interest rate | 4.00% | ||||||
Debt service coverage ratio | above 1.35 to 1.00 | ||||||
Fixed monthly payment including principal and interest | $ 23,873 | ||||||
Minimum occupancy rate to be maintained | 80.00% | ||||||
Greenbrier Business Center Property | Mortgages Payable | |||||||
Debt Instrument [Line Items] | |||||||
Fixed interest rate | 4.00% | ||||||
Refinance with new mortgage payable | $ 4,495,000 | ||||||
Parkway Property | |||||||
Debt Instrument [Line Items] | |||||||
Description of interest rate payable | ICE LIBOR rate plus 225 basis points | ||||||
Interest payable rate | 2.25% | ||||||
Percentage of rate in effect on property | 2.3493% | ||||||
Parkway Property | Mortgages Payable | |||||||
Debt Instrument [Line Items] | |||||||
Refinance with new mortgage payable | $ 5,090,210 | ||||||
Convertible Debentures | |||||||
Debt Instrument [Line Items] | |||||||
Constant maturity | 1 year | ||||||
Capitalized loan issuance costs for loan fees paid to the lender | $ 518,517 | ||||||
Principal Amount | 5,000,000 | $ 5,000,000 | |||||
Principal amount outstanding | $ 0 | ||||||
Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount outstanding | $ 3,500,000 |
Rentals under Operating Lease_2
Rentals under Operating Leases (Details) | Dec. 31, 2021USD ($) |
Future operating lease minimum payment rent | |
2022 | $ 6,550,881 |
2023 | 5,703,181 |
2024 | 4,489,189 |
2025 | 3,746,300 |
2026 | 2,601,115 |
Thereafter | 3,927,880 |
Total minimum rents | $ 27,018,546 |
Equity - Earnings Per Common Sh
Equity - Earnings Per Common Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Basic and diluted shares outstanding | ||
Weighted average Common Shares - basic | 13,092,937 | 4,709,980 |
Effect of conversion of operating partnership units | 213,531 | 119,681 |
Effect of conversion of convertible debentures (1) | 1,843,022 | |
Weighted average common shares - diluted | 13,306,468 | 6,672,683 |
Calculation of earnings per share - basic and diluted | ||
Net loss attributable to common shareholders | $ (4,364,264) | $ (8,180,609) |
Weighted average Common Shares - basic and diluted | 13,092,937 | 4,709,980 |
Earnings per share - basic | $ (0.33) | $ (1.74) |
Earnings per share - diluted | $ (0.33) | $ (1.74) |
Equity - Dividends and Distribu
Equity - Dividends and Distributions (Details) - $ / shares | Jan. 13, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Equity | |||
Dividends declared per common share | $ 0.02 | ||
Dividends per share | $ 0.125 | ||
Dividends payable, date | Mar. 10, 2020 | ||
Record date | Jan. 13, 2022 | Feb. 11, 2020 |
Equity - Dividends and Distri_2
Equity - Dividends and Distributions to Noncontrolling Interests Paid (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Equity [Line Items] | ||
Common shareholders (dividends) | $ 642,105 | $ 562,537 |
Total dividends and distributions | 1,151,304 | 917,733 |
Hampton Inn Property | ||
Equity [Line Items] | ||
Noncontrolling interest (distributions) | 466,258 | |
Hanover Square Property | ||
Equity [Line Items] | ||
Noncontrolling interest (distributions) | 34,400 | 327,840 |
Operating Partnership unit holders (distributions) | ||
Equity [Line Items] | ||
General Partner Distributions | $ 8,541 | $ 27,356 |
Equity - Purchase Shares of Com
Equity - Purchase Shares of Common Stock (Details) | Apr. 13, 2021shares | Mar. 16, 2021USD ($)directorshares | Mar. 11, 2020USD ($)directoremployeeshares | Aug. 23, 2018shares | Dec. 31, 2021D$ / sharesshares | Dec. 31, 2020shares | Jan. 01, 2022shares | Jan. 01, 2020 |
Equity [Line Items] | ||||||||
Number of common shares issued and sold | 8,000,000 | |||||||
Common Stock | ||||||||
Equity [Line Items] | ||||||||
Number of common shares issued and sold | 8,000,000 | 50,000 | ||||||
Convertible Debenture | ||||||||
Equity [Line Items] | ||||||||
Percent of the lowest volume weighted average price | 88.00% | |||||||
Trading days prior to the conversion | D | 10 | |||||||
Volume weighted average price per share | $ / shares | $ 1.9079 | |||||||
2018 Equity Incentive Plan | ||||||||
Equity [Line Items] | ||||||||
Number of shares issued | 240,000 | |||||||
Number of shares available for issuance under the plan | 9,593 | 904,146 | ||||||
Percentage of fully diluted shares of common shares | 8.00% | |||||||
Fair value of grants | $ | $ 149,981 | $ 569,995 | ||||||
2018 Equity Incentive Plan | Independent directors | ||||||||
Equity [Line Items] | ||||||||
Number of shares granted | 40,356 | 65,215 | ||||||
Number of Directors | director | 3 | 5 | ||||||
2018 Equity Incentive Plan | Employee | ||||||||
Equity [Line Items] | ||||||||
Number of shares granted | 156,522 | |||||||
Number of Employees | employee | 2 | |||||||
2018 Equity Incentive Plan | Chief financial officer | ||||||||
Equity [Line Items] | ||||||||
Number of shares granted | 26,900 | 26,087 | ||||||
Common Stock, Incremental Capital Shares Reserved for Future Issuance, Percentage | 8.00% |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) | Nov. 17, 2021 | Apr. 13, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Equity [Line Items] | ||||
Shares authorized | 1,000,000,000 | |||
Common stock, shares authorized | 750,000,000 | |||
Common stock, par value per share (in dollars per share) | $ 0.01 | |||
Preferred stock, shares authorized | 250,000,000 | |||
Preferred stock, par value per share (in dollars per share) | $ 0.01 | |||
Number of common shares issued and sold | 8,000,000 | |||
Offering price per share | $ 1.50 | |||
Net proceeds from issuance of common shares | $ 10,886,337 | |||
Authorized aggregate amount of common stock under shelf registration | $ 150 | |||
Legal costs and filing fees associated with filling of shelf registration statement | $ 84,926 | |||
Maximum period to issue common shares | 36 months | |||
Number of shares authorized to repurchase | 500,000 | |||
Maximum price per share under stock repurchase plan | $ 4.80 | |||
Operating partnership units, units outstanding | 16,052,617 | 4,803,445 | ||
Number of stock issued for conversion to common shares | 213,531 | 119,681 | ||
Standby Equity Purchase Agreement (SEPA) | ||||
Equity [Line Items] | ||||
Maximum value of shares issuable under the agreement | $ 6,665,299 | |||
Price per share as a percentage of market price | 96.50% | |||
Restrictions on owning of common shares (in percentage) | 4.99% | |||
Operating Partnership unit holders (distributions) | ||||
Equity [Line Items] | ||||
Noncontrolling ownership percentage | 98.69% | 95.74% | ||
Common units of Operating Partnership outstanding | 16,266,148 | 5,016,976 | ||
Operating partnership units, units outstanding | 16,052,617 | 4,803,445 | ||
Common Shares of the REIT outstanding | 16,052,617 | 4,803,287 | ||
Number of stock issued for conversion to common shares | 213,531 | 119,681 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Percentage of total annualized base revenues of properties in the Mid-Atlantic | 100.00% |
Commitments and Contingencies -
Commitments and Contingencies - Retail Center and Flex Center Properties (Details) | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2020USD ($) | Dec. 31, 2021USD ($)tenant | Dec. 31, 2020USD ($) | |
Other Commitments [Line Items] | |||
Number of Tenants | tenant | 3 | ||
Deferred rent | $ 81,773 | ||
Deferred Rent Payment | $ 310,118 | ||
Lease extension term | 5 years | ||
Number of Tenants, Rent abatement | tenant | 6 | ||
Total Rent Abated | $ 960,498 | ||
Number of tenants declared bankruptcy | tenant | 2 | ||
Bad debt expense | $ 18,750 | $ 39,024 | $ 34,556 |
Total Rent Reductions | 784,478 | ||
Additional Rent Under Term Extensions | 2,945,448 | ||
Retail center property revenue and tenant reimbursements | |||
Other Commitments [Line Items] | |||
Bad debt expense | $ 8,897 | ||
Retail center property revenues | |||
Other Commitments [Line Items] | |||
Bad debt expense | 16,842 | ||
Retail center property tenant reimbursements | |||
Other Commitments [Line Items] | |||
Bad debt expense | 8,817 | ||
2020 | |||
Other Commitments [Line Items] | |||
Deferred rent | 228,345 | ||
Total Rent Abated | 346,897 | ||
Total Rent Reductions | 170,114 | ||
2021 | |||
Other Commitments [Line Items] | |||
Deferred rent | 81,773 | ||
Deferred Rent Payment | 26,833 | ||
Total Rent Abated | 439,271 | ||
Total Rent Reductions | 167,448 | ||
2022 | |||
Other Commitments [Line Items] | |||
Deferred Rent Payment | 280,616 | ||
Total Rent Abated | 174,330 | ||
Total Rent Reductions | 136,448 | ||
Additional Rent Under Term Extensions | 403,918 | ||
2023 | |||
Other Commitments [Line Items] | |||
Deferred Rent Payment | 2,669 | ||
Total Rent Reductions | 120,988 | ||
Additional Rent Under Term Extensions | 661,755 | ||
2024 | |||
Other Commitments [Line Items] | |||
Total Rent Reductions | 113,688 | ||
Additional Rent Under Term Extensions | 534,589 | ||
2025 | |||
Other Commitments [Line Items] | |||
Total Rent Reductions | 75,792 | ||
Additional Rent Under Term Extensions | 489,163 | ||
Thereafter | |||
Other Commitments [Line Items] | |||
Additional Rent Under Term Extensions | $ 856,023 | ||
Minimum | |||
Other Commitments [Line Items] | |||
Lease extension term | 1 year | ||
Maximum | |||
Other Commitments [Line Items] | |||
Lease extension term | 3 years | ||
Franklin Square Property | |||
Other Commitments [Line Items] | |||
Number of Tenants | tenant | 1 | ||
Deferred Rent Payment | $ 56,250 | ||
Number of Tenants, Rent abatement | tenant | 2 | ||
Total Rent Abated | $ 679,122 | ||
Total Rent Reductions | 608,442 | ||
Additional Rent Under Term Extensions | 1,244,339 | ||
Franklin Square Property | 2020 | |||
Other Commitments [Line Items] | |||
Deferred rent | 56,250 | ||
Total Rent Abated | 204,721 | ||
Total Rent Reductions | 77,898 | ||
Franklin Square Property | 2021 | |||
Other Commitments [Line Items] | |||
Total Rent Abated | 334,871 | ||
Total Rent Reductions | 113,688 | ||
Franklin Square Property | 2022 | |||
Other Commitments [Line Items] | |||
Deferred Rent Payment | 53,581 | ||
Total Rent Abated | 139,530 | ||
Total Rent Reductions | 113,688 | ||
Additional Rent Under Term Extensions | 161,849 | ||
Franklin Square Property | 2023 | |||
Other Commitments [Line Items] | |||
Deferred Rent Payment | 2,669 | ||
Total Rent Reductions | 113,688 | ||
Additional Rent Under Term Extensions | 277,456 | ||
Franklin Square Property | 2024 | |||
Other Commitments [Line Items] | |||
Total Rent Reductions | 113,688 | ||
Additional Rent Under Term Extensions | 333,039 | ||
Franklin Square Property | 2025 | |||
Other Commitments [Line Items] | |||
Total Rent Reductions | 75,792 | ||
Additional Rent Under Term Extensions | 360,830 | ||
Franklin Square Property | Thereafter | |||
Other Commitments [Line Items] | |||
Additional Rent Under Term Extensions | $ 111,165 | ||
Hanover Square Property | |||
Other Commitments [Line Items] | |||
Number of Tenants | tenant | 1 | ||
Deferred Rent Payment | $ 26,833 | ||
Number of Tenants, Rent abatement | tenant | 2 | ||
Total Rent Abated | $ 211,171 | ||
Total Rent Reductions | 14,563 | ||
Additional Rent Under Term Extensions | 577,925 | ||
Hanover Square Property | 2020 | |||
Other Commitments [Line Items] | |||
Deferred rent | 26,833 | ||
Total Rent Abated | 71,971 | ||
Total Rent Reductions | 14,563 | ||
Hanover Square Property | 2021 | |||
Other Commitments [Line Items] | |||
Deferred Rent Payment | 26,833 | ||
Total Rent Abated | 104,400 | ||
Hanover Square Property | 2022 | |||
Other Commitments [Line Items] | |||
Total Rent Abated | 34,800 | ||
Additional Rent Under Term Extensions | 242,069 | ||
Hanover Square Property | 2023 | |||
Other Commitments [Line Items] | |||
Additional Rent Under Term Extensions | 259,306 | ||
Hanover Square Property | 2024 | |||
Other Commitments [Line Items] | |||
Additional Rent Under Term Extensions | $ 76,550 | ||
Ashley Plaza Property | |||
Other Commitments [Line Items] | |||
Number of Tenants | tenant | 1 | ||
Number of Tenants, Rent abatement | tenant | 2 | ||
Total Rent Abated | $ 70,205 | ||
Total Rent Reductions | 161,473 | ||
Additional Rent Under Term Extensions | 1,123,184 | ||
Ashley Plaza Property | 2020 | |||
Other Commitments [Line Items] | |||
Total Rent Abated | 70,205 | ||
Total Rent Reductions | 77,653 | ||
Ashley Plaza Property | 2021 | |||
Other Commitments [Line Items] | |||
Total Rent Reductions | 53,760 | ||
Ashley Plaza Property | 2022 | |||
Other Commitments [Line Items] | |||
Total Rent Reductions | 22,760 | ||
Ashley Plaza Property | 2023 | |||
Other Commitments [Line Items] | |||
Total Rent Reductions | 7,300 | ||
Additional Rent Under Term Extensions | 124,993 | ||
Ashley Plaza Property | 2024 | |||
Other Commitments [Line Items] | |||
Additional Rent Under Term Extensions | 125,000 | ||
Ashley Plaza Property | 2025 | |||
Other Commitments [Line Items] | |||
Additional Rent Under Term Extensions | 128,333 | ||
Ashley Plaza Property | Thereafter | |||
Other Commitments [Line Items] | |||
Additional Rent Under Term Extensions | $ 744,858 | ||
Brookfield Center Property. | |||
Other Commitments [Line Items] | |||
Number of Tenants | tenant | 1 | ||
Deferred rent | $ 81,773 | ||
Deferred Rent Payment | 227,035 | ||
Brookfield Center Property. | 2020 | |||
Other Commitments [Line Items] | |||
Deferred rent | 145,262 | ||
Brookfield Center Property. | 2021 | |||
Other Commitments [Line Items] | |||
Deferred rent | 81,773 | ||
Brookfield Center Property. | 2022 | |||
Other Commitments [Line Items] | |||
Deferred Rent Payment | $ 227,035 |
Commitments and Contingencies_3
Commitments and Contingencies - Hotel Properties (Details) - room | 1 Months Ended | 2 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||
Dec. 31, 2021 | Nov. 30, 2021 | Oct. 31, 2021 | Sep. 30, 2021 | Aug. 31, 2021 | Jul. 31, 2021 | Jun. 30, 2021 | May 31, 2021 | Apr. 30, 2021 | Mar. 31, 2021 | Feb. 28, 2021 | Jan. 31, 2021 | Dec. 31, 2020 | Nov. 30, 2020 | Oct. 31, 2020 | Sep. 30, 2020 | Aug. 31, 2020 | Jul. 31, 2020 | Jun. 30, 2020 | May 31, 2020 | Apr. 30, 2020 | Mar. 31, 2020 | Feb. 29, 2020 | Jan. 31, 2020 | Dec. 31, 2019 | Nov. 30, 2019 | Oct. 31, 2019 | Sep. 30, 2019 | Aug. 31, 2019 | Jul. 31, 2019 | Jun. 30, 2019 | May 31, 2019 | Apr. 30, 2019 | Mar. 31, 2019 | Feb. 28, 2019 | Jan. 31, 2019 | Feb. 28, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Other Commitments [Line Items] | ||||||||||||||||||||||||||||||||||||||||||
Number of room nights of occupancy | 2,064 | 5,704 | ||||||||||||||||||||||||||||||||||||||||
Total occupied room | 49.00% | 33.00% | 39.00% | 28.00% | ||||||||||||||||||||||||||||||||||||||
Hampton Inn Property | ||||||||||||||||||||||||||||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||||||||||||||||||||||||||||
Occupancy rate (as a percent) | 69.50% | 80.50% | 70.40% | 66.10% | 56.30% | 51.80% | 68.30% | 47.80% | 24.40% | 28.80% | 41.80% | 59.80% | 50.30% | 65.10% | 49.60% | 41.50% | 25.70% | 33.30% | 72.00% | 41.60% | 48.70% | 66.60% | 75.00% | 65.00% | 75.70% | 60.80% | 72.10% | 55.80% | 62.30% | 64.10% | 51.90% | 43.90% | 44.40% | 60.60% | ||||||||
Average Daily Rate | 101.92 | 104.80 | 126.38 | 102.11 | 93.46 | 94.10 | 81.74 | 72.85 | 75.67 | 83.02 | 99.43 | 80.27 | 77.73 | 71.34 | 73.40 | 67.87 | 65.15 | 106.98 | 102.73 | 100.41 | 99.43 | 106.43 | 160.01 | 105.22 | 107.29 | 110.57 | 103.89 | 111.37 | 149.33 | 109.11 | 105.15 | 94.57 | 84.10 | 113.41 | ||||||||
Clemson Best Western Property | ||||||||||||||||||||||||||||||||||||||||||
Other Commitments [Line Items] | ||||||||||||||||||||||||||||||||||||||||||
Occupancy rate (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 99.70% | 100.00% | 100.00% | 65.00% | 27.00% | 22.70% | 24.00% | 19.90% | 24.50% | 26.70% | 31.90% | 24.80% | 28.40% | 39.30% | 38.30% | 38.50% | 47.20% | 31.60% | 38.40% | 37.50% | 47.40% | 67.30% | 34.80% | 27.40% | 100.00% | 47.20% | 34.90% | |||
Average Daily Rate | 19 | 59 | 59 | 59 | 48.03 | 39 | 39 | 42.23 | 59 | 59.05 | 58.83 | 55.13 | 26.94 | 58.48 | 58.99 | 67.59 | 64.35 | 56.13 | 61.24 | 61.54 | 68.97 | 90.58 | 94.07 | 77.04 | 83.12 | 121.87 | 143.35 | 161.11 | 111.60 | 85.34 | 93.80 | 109.69 | 103.92 | 92.61 | 92.03 | 98.10 | 49.57 | 59.08 | 118.64 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Mar. 16, 2021 | |
Related Party Transaction [Line Items] | |||
Percentage of asset management fee | 0.125% | ||
Asset management fees | $ 817,029 | $ 605,414 | |
Type of Cost, Good or Service [Extensible List] | us-gaap:AssetManagement1Member | ||
Percentage of acquisition fee | 2.00% | ||
Threshold Stock Price to be Reached for Payment of Deferred Acquisition Fees | $ 5 | ||
Percentage of incentive fee | 20.00% | ||
Percentage of weighted average number of shares | 7.00% | ||
Shockoe Properties, LLC | |||
Related Party Transaction [Line Items] | |||
Property management fees | $ 200,216 | $ 146,417 | |
Type of Cost, Good or Service [Extensible List] | us-gaap:AssetManagement1Member | ||
Related party ownership of management company | 6.32% | ||
Threshold limit of percentage of asset management fee | up to three percent of the monthly gross revenues | ||
Percentage of rent | 3.00% | ||
Lancer Center Property Acquisition[Member] | |||
Related Party Transaction [Line Items] | |||
Threshold Stock Price to be Reached for Payment of Deferred Acquisition Fees | $ 5 | ||
Aggregate Acquisition Fees Incurred | $ 503,910 | ||
Cash Payment of Acquisition Fee | $ 251,955 |
Segment Information - Property
Segment Information - Property Operating Revenues, Expenses and NOI by Product Type (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 11,472,549 | $ 9,276,160 |
Operating expenses | 10,782,686 | 15,018,058 |
Bad debt expense | 39,024 | 431,143 |
Operating income (loss) | 814,504 | (5,741,898) |
Operating segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 11,472,549 | 9,276,160 |
Operating expenses | 4,965,641 | 4,758,387 |
Bad debt expense | 39,024 | 431,143 |
Operating income (loss) | 6,467,884 | 4,086,630 |
Operating segments | Hotel properties. | ||
Segment Reporting Information [Line Items] | ||
Revenues | 4,635,331 | 3,337,176 |
Operating expenses | 3,102,951 | 3,164,646 |
Operating income (loss) | 1,532,380 | 172,530 |
Operating segments | Retail center properties | ||
Segment Reporting Information [Line Items] | ||
Revenues | 5,634,396 | 5,152,150 |
Operating expenses | 1,518,973 | 1,362,532 |
Bad debt expense | 38,346 | 431,143 |
Operating income (loss) | 4,077,077 | 3,358,475 |
Operating segments | Flex center property | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,202,822 | 786,834 |
Operating expenses | 343,717 | 231,209 |
Bad debt expense | 678 | 0 |
Operating income (loss) | $ 858,427 | $ 555,625 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | Mar. 15, 2022shares | Mar. 02, 2022employeeshares | Jan. 20, 2022$ / shares | Jan. 13, 2022 | Jan. 01, 2022$ / sharesshares | Oct. 27, 2021$ / shares | Jul. 26, 2021$ / shares | Apr. 30, 2021$ / shares | Apr. 13, 2021shares | Mar. 16, 2021directorshares | Feb. 01, 2021$ / shares | Oct. 26, 2020$ / shares | Jul. 24, 2020$ / shares | Apr. 27, 2020$ / shares | Mar. 11, 2020employeedirectorshares | Feb. 19, 2020shares | Dec. 31, 2021$ / sharesshares | Dec. 31, 2020$ / sharesshares |
Subsequent Event [Line Items] | ||||||||||||||||||
Common stock dividend paid | $ / shares | $ 0.04 | $ 0.125 | ||||||||||||||||
Record date | Jan. 13, 2022 | Feb. 11, 2020 | ||||||||||||||||
Common stock issuances (shares) | 8,000,000 | |||||||||||||||||
2018 Equity Incentive Plan | Employee | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Number of shares granted | 156,522 | |||||||||||||||||
Number Of Employees | employee | 2 | |||||||||||||||||
2018 Equity Incentive Plan | Independent directors | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Number of shares granted | 40,356 | 65,215 | ||||||||||||||||
Number Of Directors | director | 3 | 5 | ||||||||||||||||
2018 Equity Incentive Plan | Chief financial officer | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Number of shares granted | 26,900 | 26,087 | ||||||||||||||||
Common Stock | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Common stock issuances (shares) | 8,000,000 | 50,000 | ||||||||||||||||
Mandatorily redeemable preferred stock | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Common stock issuances (shares) | 200,000 | |||||||||||||||||
Dividends paid (in dollars per share) | $ / shares | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.37 | ||||||||||
Subsequent event | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Number of shares repurchased | 268,070 | |||||||||||||||||
Average price per share | $ / shares | $ 1.04 | |||||||||||||||||
Subsequent event | Common Stock | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Common stock dividend paid | $ / shares | 0.02 | |||||||||||||||||
Number Of Employees | employee | 2 | |||||||||||||||||
Number Of Directors | employee | 3 | |||||||||||||||||
Subsequent event | Common Stock | Standby Equity Purchase Agreement (SEPA) | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Common stock issuances (shares) | 366,790 | |||||||||||||||||
Subsequent event | Common Stock | Employee | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Number of shares granted | 60,000 | |||||||||||||||||
Subsequent event | Common Stock | Independent directors | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Number of shares granted | 90,000 | |||||||||||||||||
Subsequent event | Common Stock | Chief financial officer | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Number of shares granted | 60,000 | |||||||||||||||||
Subsequent event | Mandatorily redeemable preferred stock | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Dividends paid (in dollars per share) | $ / shares | $ 0.50 |
Schedule III - Real Estate Pr_2
Schedule III - Real Estate Properties and Accumulated Depreciation - Real Estate Properties (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Initial Cost to Company | |||
Buildings and Improvements | $ 308,803 | $ 232,797 | |
Costs Written Off Due to Impairment and Loss on Dispositions | (3,749,015) | ||
Gross Amount at Which Carried at Close of Period | |||
Total | 86,464,643 | 75,967,825 | $ 79,302,479 |
Accumulated Depreciation | 7,210,520 | 6,501,713 | 3,510,654 |
Franklin Square Property | |||
Initial Cost to Company | |||
Buildings and Improvements | 14,967 | ||
Costs Written Off Due to Impairment and Loss on Dispositions | (254,957) | ||
Gross Amount at Which Carried at Close of Period | |||
Total | 19,220,574 | 19,251,826 | 19,467,626 |
Accumulated Depreciation | 2,686,982 | 2,181,039 | 1,646,374 |
Hanover Square Property | |||
Initial Cost to Company | |||
Buildings and Improvements | 85,250 | 103,194 | |
Gross Amount at Which Carried at Close of Period | |||
Total | 11,683,302 | 11,617,856 | 11,502,073 |
Accumulated Depreciation | 1,226,885 | 909,211 | 572,300 |
Hampton Inn Property | |||
Initial Cost to Company | |||
Buildings and Improvements | 62,087 | ||
Costs Written Off Due to Impairment and Loss on Dispositions | (3,494,058) | ||
Gross Amount at Which Carried at Close of Period | |||
Total | 13,972,091 | 17,343,770 | |
Accumulated Depreciation | 1,561,841 | 884,281 | |
Ashley Plaza Property | |||
Gross Amount at Which Carried at Close of Period | |||
Total | 14,296,145 | 14,282,764 | 14,217,764 |
Accumulated Depreciation | 1,411,023 | 808,059 | 200,544 |
Lancer Center Shopping Center | |||
Initial Cost to Company | |||
Buildings and Improvements | 78,932 | ||
Gross Amount at Which Carried at Close of Period | |||
Total | 10,071,797 | ||
Accumulated Depreciation | 455,898 | ||
Clemson Best Western University Inn | |||
Initial Cost to Company | |||
Buildings and Improvements | 129,654 | 67,516 | |
Gross Amount at Which Carried at Close of Period | |||
Total | 10,568,508 | 10,405,855 | 10,333,813 |
Accumulated Depreciation | 722,300 | 722,300 | 143,603 |
Greenbrier Business Center Property | |||
Gross Amount at Which Carried at Close of Period | |||
Total | 6,898,842 | ||
Accumulated Depreciation | 86,014 | ||
Brookfield Center Property. | |||
Gross Amount at Which Carried at Close of Period | |||
Total | 6,445,169 | 6,437,433 | 6,437,433 |
Accumulated Depreciation | 579,739 | $ 319,263 | $ 63,552 |
Parkway Center | |||
Gross Amount at Which Carried at Close of Period | |||
Total | 7,280,306 | ||
Accumulated Depreciation | 41,679 | ||
Retail properties | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | 40,999,812 | ||
Initial Cost to Company | |||
Land | 11,704,892 | ||
Buildings and Improvements | 42,628,194 | ||
Costs Capitalized Subsequent to Acquisition | 1,398,554 | ||
Costs Written Off Due to Impairment and Loss on Dispositions | (309,435) | ||
Gross Amount at Which Carried at Close of Period | |||
Fully Amortized Improvements | (150,387) | ||
Land | 11,704,892 | ||
Buildings and Improvements | 43,566,926 | ||
Total | 55,271,818 | ||
Accumulated Depreciation | 5,780,788 | ||
Retail properties | Franklin Square Property | North Carolina | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | 13,250,000 | ||
Initial Cost to Company | |||
Land | 3,343,164 | ||
Buildings and Improvements | 15,418,158 | ||
Costs Capitalized Subsequent to Acquisition | 883,146 | ||
Costs Written Off Due to Impairment and Loss on Dispositions | (309,435) | ||
Gross Amount at Which Carried at Close of Period | |||
Fully Amortized Improvements | (114,459) | ||
Land | 3,343,164 | ||
Buildings and Improvements | 15,877,410 | ||
Total | 19,220,574 | ||
Accumulated Depreciation | $ 2,686,982 | ||
Retail properties | Franklin Square Property | North Carolina | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 38 years | ||
Retail properties | Franklin Square Property | North Carolina | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 13 years | ||
Retail properties | Hanover Square Property | Virginia | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | $ 10,134,667 | ||
Initial Cost to Company | |||
Land | 3,158,882 | ||
Buildings and Improvements | 8,334,478 | ||
Costs Capitalized Subsequent to Acquisition | 219,738 | ||
Gross Amount at Which Carried at Close of Period | |||
Fully Amortized Improvements | (29,796) | ||
Land | 3,158,882 | ||
Buildings and Improvements | 8,524,420 | ||
Total | 11,683,302 | ||
Accumulated Depreciation | $ 1,226,885 | ||
Retail properties | Hanover Square Property | Virginia | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 39 years | ||
Retail properties | Hanover Square Property | Virginia | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 12 years | ||
Retail properties | Ashley Plaza Property | North Carolina | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | $ 11,127,111 | ||
Initial Cost to Company | |||
Land | 3,007,721 | ||
Buildings and Improvements | 11,191,307 | ||
Costs Capitalized Subsequent to Acquisition | 103,249 | ||
Gross Amount at Which Carried at Close of Period | |||
Fully Amortized Improvements | (6,132) | ||
Land | 3,007,721 | ||
Buildings and Improvements | 11,288,424 | ||
Total | 14,296,145 | ||
Accumulated Depreciation | $ 1,411,023 | ||
Retail properties | Ashley Plaza Property | North Carolina | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 26 years 8 months 12 days | ||
Retail properties | Ashley Plaza Property | North Carolina | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 5 years | ||
Retail properties | Lancer Center Shopping Center | South Carolina | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | $ 6,488,034 | ||
Initial Cost to Company | |||
Land | 2,195,125 | ||
Buildings and Improvements | 7,684,251 | ||
Costs Capitalized Subsequent to Acquisition | 192,421 | ||
Gross Amount at Which Carried at Close of Period | |||
Land | 2,195,125 | ||
Buildings and Improvements | 7,876,672 | ||
Total | 10,071,797 | ||
Accumulated Depreciation | $ 455,898 | ||
Retail properties | Lancer Center Shopping Center | South Carolina | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 14 years 2 months 12 days | ||
Retail properties | Lancer Center Shopping Center | South Carolina | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 7 years 6 months | ||
Hotel properties | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | $ 7,750,000 | ||
Initial Cost to Company | |||
Land | 2,057,706 | ||
Buildings and Improvements | 8,271,247 | ||
Costs Capitalized Subsequent to Acquisition | 239,555 | ||
Gross Amount at Which Carried at Close of Period | |||
Land | 2,057,706 | ||
Buildings and Improvements | 8,510,802 | ||
Total | 10,568,508 | ||
Accumulated Depreciation | 722,300 | ||
Hotel properties | Clemson Best Western University Inn | South Carolina | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | 7,750,000 | ||
Initial Cost to Company | |||
Land | 2,057,706 | ||
Buildings and Improvements | 8,271,247 | ||
Costs Capitalized Subsequent to Acquisition | 239,555 | ||
Gross Amount at Which Carried at Close of Period | |||
Land | 2,057,706 | ||
Buildings and Improvements | 8,510,802 | ||
Total | 10,568,508 | ||
Accumulated Depreciation | $ 722,300 | ||
Hotel properties | Clemson Best Western University Inn | South Carolina | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 30 years | ||
Hotel properties | Clemson Best Western University Inn | South Carolina | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 6 years 4 months 24 days | ||
Investment properties | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | $ 63,093,366 | ||
Initial Cost to Company | |||
Land | 16,200,261 | ||
Buildings and Improvements | 69,042,984 | ||
Costs Capitalized Subsequent to Acquisition | 1,681,220 | ||
Costs Written Off Due to Impairment and Loss on Dispositions | (309,435) | ||
Gross Amount at Which Carried at Close of Period | |||
Fully Amortized Improvements | (150,387) | ||
Land | 16,200,261 | ||
Buildings and Improvements | 70,264,382 | ||
Total | 86,464,643 | ||
Accumulated Depreciation | 7,210,520 | ||
Investment properties and assets held for sale | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | 14,343,554 | ||
Initial Cost to Company | |||
Land | 2,437,663 | ||
Buildings and Improvements | 18,143,543 | ||
Costs Capitalized Subsequent to Acquisition | 43,111 | ||
Gross Amount at Which Carried at Close of Period | |||
Land | 2,437,663 | ||
Buildings and Improvements | 18,186,654 | ||
Total | 20,624,317 | ||
Accumulated Depreciation | 707,432 | ||
Investment properties and assets held for sale | Greenbrier Business Center Property | Virginia | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | 4,495,000 | ||
Initial Cost to Company | |||
Land | 1,292,894 | ||
Buildings and Improvements | 5,603,909 | ||
Costs Capitalized Subsequent to Acquisition | 2,039 | ||
Gross Amount at Which Carried at Close of Period | |||
Land | 1,292,894 | ||
Buildings and Improvements | 5,605,948 | ||
Total | 6,898,842 | ||
Accumulated Depreciation | $ 86,014 | ||
Investment properties and assets held for sale | Greenbrier Business Center Property | Virginia | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 26 years | ||
Investment properties and assets held for sale | Greenbrier Business Center Property | Virginia | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 10 years | ||
Investment properties and assets held for sale | Brookfield Center Property. | South Carolina | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | $ 4,758,344 | ||
Initial Cost to Company | |||
Land | 714,220 | ||
Buildings and Improvements | 5,693,147 | ||
Costs Capitalized Subsequent to Acquisition | 37,802 | ||
Gross Amount at Which Carried at Close of Period | |||
Land | 714,220 | ||
Buildings and Improvements | 5,730,949 | ||
Total | 6,445,169 | ||
Accumulated Depreciation | $ 579,739 | ||
Investment properties and assets held for sale | Brookfield Center Property. | South Carolina | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 40 years | ||
Investment properties and assets held for sale | Brookfield Center Property. | South Carolina | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 4 years 3 months 18 days | ||
Investment properties and assets held for sale | Parkway Center | Virginia | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | $ 5,090,210 | ||
Initial Cost to Company | |||
Land | 430,549 | ||
Buildings and Improvements | 6,846,487 | ||
Costs Capitalized Subsequent to Acquisition | 3,270 | ||
Gross Amount at Which Carried at Close of Period | |||
Land | 430,549 | ||
Buildings and Improvements | 6,849,757 | ||
Total | 7,280,306 | ||
Accumulated Depreciation | $ 41,679 | ||
Investment properties and assets held for sale | Parkway Center | Virginia | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 42 years | ||
Investment properties and assets held for sale | Parkway Center | Virginia | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 11 years |
Schedule III - Real Estate Pr_3
Schedule III - Real Estate Properties and Accumulated Depreciation - Accumulated Depreciation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | $ 75,967,825 | $ 79,302,479 |
Acquisitions | 24,053,215 | |
Capitalized leasing commissions | 73,458 | 44,157 |
Capitalized tenant improvements | 143,079 | 72,589 |
Buildings and Improvements | 308,803 | 232,797 |
Impairment write-offs | (3,749,015) | |
Fully amortized tenant improvements | (142,645) | |
Furniture, Fixtures and Equipment | 32,999 | 64,818 |
Dispositions of investment properties | (13,972,091) | |
Balance at end of period | 86,464,643 | 75,967,825 |
Accumulated depreciation | ||
Balance at beginning of period | 6,501,713 | 3,510,654 |
Additions charged to costs and expenses | 2,270,648 | 3,074,656 |
Impairment write-offs | (1,561,841) | (83,597) |
Balance at end of period | 7,210,520 | 6,501,713 |
Net investments in real estate - end of period | 79,254,123 | 69,466,112 |
Franklin Square Property | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 19,251,826 | 19,467,626 |
Capitalized leasing commissions | 15,348 | 39,157 |
Capitalized tenant improvements | 45,150 | |
Buildings and Improvements | 14,967 | |
Impairment write-offs | (254,957) | |
Fully amortized tenant improvements | (106,717) | |
Balance at end of period | 19,220,574 | 19,251,826 |
Accumulated depreciation | ||
Balance at beginning of period | 2,181,039 | 1,646,374 |
Additions charged to costs and expenses | 505,943 | 618,262 |
Impairment write-offs | (83,597) | |
Balance at end of period | 2,686,982 | 2,181,039 |
Net investments in real estate - end of period | 16,533,592 | 17,070,787 |
Hanover Square Property | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 11,617,856 | 11,502,073 |
Capitalized leasing commissions | 9,992 | |
Capitalized tenant improvements | 12,589 | |
Buildings and Improvements | 85,250 | 103,194 |
Fully amortized tenant improvements | (29,796) | |
Balance at end of period | 11,683,302 | 11,617,856 |
Accumulated depreciation | ||
Balance at beginning of period | 909,211 | 572,300 |
Additions charged to costs and expenses | 317,674 | 336,911 |
Balance at end of period | 1,226,885 | 909,211 |
Net investments in real estate - end of period | 10,456,417 | 10,708,645 |
Hampton Inn Property | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 13,972,091 | 17,343,770 |
Buildings and Improvements | 62,087 | |
Impairment write-offs | (3,494,058) | |
Furniture, Fixtures and Equipment | 60,292 | |
Dispositions of investment properties | (13,972,091) | |
Balance at end of period | 13,972,091 | |
Accumulated depreciation | ||
Balance at beginning of period | 1,561,841 | 884,281 |
Additions charged to costs and expenses | 677,560 | |
Impairment write-offs | (1,561,841) | |
Balance at end of period | 1,561,841 | |
Net investments in real estate - end of period | 12,410,250 | |
Ashley Plaza Property | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 14,282,764 | 14,217,764 |
Capitalized leasing commissions | 19,513 | 5,000 |
Capitalized tenant improvements | 60,000 | |
Fully amortized tenant improvements | (6,132) | |
Balance at end of period | 14,296,145 | 14,282,764 |
Accumulated depreciation | ||
Balance at beginning of period | 808,059 | 200,544 |
Additions charged to costs and expenses | 602,964 | 607,515 |
Balance at end of period | 1,411,023 | 808,059 |
Net investments in real estate - end of period | 12,885,122 | 13,474,705 |
Clemson Best Western University Inn | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 10,405,855 | 10,333,813 |
Buildings and Improvements | 129,654 | 67,516 |
Furniture, Fixtures and Equipment | 32,999 | 4,526 |
Balance at end of period | 10,568,508 | 10,405,855 |
Accumulated depreciation | ||
Balance at beginning of period | 722,300 | 143,603 |
Additions charged to costs and expenses | 578,697 | |
Balance at end of period | 722,300 | 722,300 |
Net investments in real estate - end of period | 9,846,208 | 9,683,555 |
Brookfield Center Property. | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 6,437,433 | 6,437,433 |
Capitalized leasing commissions | 7,736 | |
Balance at end of period | 6,445,169 | 6,437,433 |
Accumulated depreciation | ||
Balance at beginning of period | 319,263 | 63,552 |
Additions charged to costs and expenses | 260,476 | 255,711 |
Balance at end of period | 579,739 | 319,263 |
Net investments in real estate - end of period | 5,865,430 | $ 6,118,170 |
Lancer Center Shopping Center | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Acquisitions | 9,879,376 | |
Capitalized leasing commissions | 15,560 | |
Capitalized tenant improvements | 97,929 | |
Buildings and Improvements | 78,932 | |
Balance at end of period | 10,071,797 | |
Accumulated depreciation | ||
Additions charged to costs and expenses | 455,898 | |
Balance at end of period | 455,898 | |
Net investments in real estate - end of period | 9,615,899 | |
Greenbrier Business Center Property | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Acquisitions | 6,896,803 | |
Capitalized leasing commissions | 2,039 | |
Balance at end of period | 6,898,842 | |
Accumulated depreciation | ||
Additions charged to costs and expenses | 86,014 | |
Balance at end of period | 86,014 | |
Net investments in real estate - end of period | 6,812,828 | |
Parkway Center | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Acquisitions | 7,277,036 | |
Capitalized leasing commissions | 3,270 | |
Balance at end of period | 7,280,306 | |
Accumulated depreciation | ||
Additions charged to costs and expenses | 41,679 | |
Balance at end of period | 41,679 | |
Net investments in real estate - end of period | $ 7,238,627 |