Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 09, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
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, Address Line Two | James Center Three | |
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 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 Common Stock, Shares Outstanding | 17,439,947 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001654595 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
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, $0.01 par value per share | |
Security Exchange Name | NASDAQ | |
Trading Symbol | MDRRP |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||
Investment properties, net | $ 77,326,431 | $ 69,407,915 |
Cash | 4,863,963 | 4,370,405 |
Restricted cash | 2,109,121 | 3,013,572 |
Rent and other receivables, net of allowance of $18,219 and $13,010, as of September 30, 2022 and December 31, 2021, respectively | 241,819 | 466,141 |
Assets held for sale | 9,846,208 | |
Unbilled rent | 985,089 | 872,322 |
Intangible assets, net | 4,065,995 | 4,200,392 |
Other assets | 517,263 | 370,133 |
Total Assets | 90,109,681 | 92,547,088 |
LIABILITIES | ||
Accounts payable and accrued liabilities | 2,184,854 | 1,307,257 |
Intangible liabilities, net | 2,344,281 | 1,880,612 |
Mortgages payable, net | 61,552,851 | 54,517,822 |
Mortgages payable, net, associated with assets held for sale | 7,615,368 | |
Mandatorily redeemable preferred stock, net | 4,392,978 | 4,227,640 |
Total Liabilities | 70,474,964 | 69,548,699 |
EQUITY | ||
Common stock, 17,439,947 and 16,052,617 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 174,399 | 160,526 |
Additional paid-in capital | 51,116,997 | 49,645,426 |
Offering costs | (3,350,946) | (3,350,946) |
Accumulated deficit | (29,754,023) | (24,981,346) |
Total Stockholders' Equity | 18,186,427 | 21,473,660 |
Noncontrolling interests - Operating Partnership | 844,830 | 877,917 |
Total Equity | 19,634,717 | 22,998,389 |
Total Liabilities and Equity | 90,109,681 | 92,547,088 |
Hanover Square Property | ||
EQUITY | ||
Noncontrolling interests | 120,824 | 146,603 |
Parkway Property | ||
EQUITY | ||
Noncontrolling interests | $ 482,636 | $ 500,209 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Condensed Consolidated Balance Sheets | ||
Allowance for uncollectible receivables | $ 18,219 | $ 13,010 |
Common stock, shares, issued | 17,439,947 | 16,052,617 |
Common stock, shares, outstanding | 17,439,947 | 16,052,617 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
REVENUE | ||||
Total Revenue | $ 2,841,073 | $ 3,038,143 | $ 8,340,938 | $ 8,688,257 |
OPERATING EXPENSES | ||||
Retail center property operating expenses | 491,889 | 397,250 | 1,384,061 | 1,079,014 |
Flex center property operating expenses | 189,720 | 78,045 | 511,771 | 196,849 |
Hotel property operating expenses | 589,311 | 960,994 | 1,302,114 | 2,733,578 |
Bad debt expense | 22,818 | 12,946 | 26,014 | |
Share based compensation expenses | 233,100 | 149,981 | ||
Legal, accounting and other professional fees | 284,463 | 311,986 | 1,112,878 | 1,099,881 |
Corporate general and administrative expenses | 99,323 | 382,302 | 335,538 | 568,479 |
Loss on impairment | 36,670 | |||
Impairment of assets held for sale | 175,671 | |||
Other expense | 227,164 | 227,164 | ||
Depreciation and amortization | 1,231,513 | 937,604 | 3,509,165 | 2,361,214 |
Total Operating Expenses | 3,113,383 | 3,090,999 | 8,841,078 | 8,215,010 |
Loss (gain) on disposal of investment properties | (389,471) | 124,641 | (389,471) | 124,641 |
Loss on extinguishment of debt | 219,532 | 389,207 | ||
Operating (loss) income | (881,313) | 71,785 | (1,278,818) | 597,888 |
Interest expense | 989,255 | 950,770 | 2,704,835 | 4,609,198 |
Net Loss from Operations | (1,870,568) | (878,985) | (3,983,653) | (4,011,310) |
Other income | 126,434 | 3,519 | 251,197 | 187,278 |
Net Loss | (1,744,134) | (875,466) | (3,732,456) | (3,824,032) |
Less: Net income (loss) attributable to Operating Partnership noncontrolling interests | (14,926) | (450) | (20,275) | 3,023 |
Net Loss Attributable to Medalist Common Shareholders | $ (1,754,458) | $ (872,015) | $ (3,758,629) | $ (3,832,502) |
Loss per share from operations - basic | $ (0.10) | $ (0.05) | $ (0.22) | $ (0.32) |
Loss per share from operations - diluted | $ (0.10) | $ (0.05) | $ (0.22) | $ (0.32) |
Weighted-average number of shares - basic | 17,439,947 | 16,052,617 | 16,972,322 | 12,106,377 |
Weighted-average number of shares - diluted | 17,439,947 | 16,052,617 | 16,972,322 | 12,106,377 |
Dividends paid per common share | $ 0.02 | $ 0.02 | $ 0.06 | $ 0.02 |
Hampton Inn Property | ||||
OPERATING EXPENSES | ||||
Loss (gain) on disposal of investment properties | $ 124,641 | $ 124,641 | ||
Interest expense | 118,077 | 475,844 | ||
Less: Net income (loss) attributable to noncontrolling interests | 1,590 | 19,845 | ||
Hanover Square Property | ||||
OPERATING EXPENSES | ||||
Interest expense | $ 111,445 | 111,794 | $ 329,308 | 338,316 |
Less: Net income (loss) attributable to noncontrolling interests | 8,468 | (4,591) | 15,421 | (14,398) |
Parkway Property | ||||
OPERATING EXPENSES | ||||
Less: Net income (loss) attributable to noncontrolling interests | 16,782 | 31,027 | ||
Retail center property revenues | ||||
REVENUE | ||||
Total Revenue | 1,850,797 | 1,494,219 | 4,999,089 | 4,049,209 |
Flex center property revenues | ||||
REVENUE | ||||
Total Revenue | 610,967 | 263,586 | 1,834,200 | 630,007 |
Hotel property room revenues | ||||
REVENUE | ||||
Total Revenue | 376,560 | 1,262,406 | 1,494,836 | 3,970,548 |
Hotel property other revenues | ||||
REVENUE | ||||
Total Revenue | $ 2,749 | $ 17,932 | $ 12,813 | $ 38,493 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Equity - USD ($) | Common Stock | Additional Paid in Capital | Offering Costs. | Accumulated Deficit | Total Shareholders' Equity | Noncontrolling Interests Hampton Inn Property | Noncontrolling Interests Hanover Square Property | Noncontrolling Interests Parkway Property | Noncontrolling Interest Operating Partnership | Total |
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 | |||||||||
Common stock repurchases | $ 0 | 0 | ||||||||
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 | (333,080) | (333,080) | (333,080) | |||||||
Dividends and distributions | (321,052) | (321,052) | (358,576) | (28,000) | (4,271) | (711,899) | ||||
Net (loss) income | (3,832,502) | (3,832,502) | 19,845 | (14,398) | 3,023 | (3,824,032) | ||||
Balance at Sep. 30, 2021 | $ 160,526 | 49,645,426 | (3,325,437) | (23,452,541) | 23,027,974 | (563,114) | 147,386 | 881,307 | 23,493,553 | |
Balance (shares) at Sep. 30, 2021 | 16,052,617 | |||||||||
Balance at Jun. 30, 2021 | $ 160,526 | 49,645,426 | (3,298,752) | (22,259,474) | 24,247,726 | (206,128) | 167,977 | 886,028 | 25,095,603 | |
Balance (shares) at Jun. 30, 2021 | 16,052,617 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Common stock repurchases | $ 0 | 0 | ||||||||
Offering costs | (26,685) | (26,685) | (26,685) | |||||||
Dividends and distributions | (321,052) | (321,052) | (358,576) | (16,000) | (4,271) | (699,899) | ||||
Net (loss) income | (872,015) | (872,015) | 1,590 | (4,591) | (450) | (875,466) | ||||
Balance at Sep. 30, 2021 | $ 160,526 | 49,645,426 | (3,325,437) | (23,452,541) | 23,027,974 | $ (563,114) | 147,386 | 881,307 | 23,493,553 | |
Balance (shares) at Sep. 30, 2021 | 16,052,617 | |||||||||
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 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Common stock issuances | $ 14,454 | 1,524,433 | 1,538,887 | $ 1,538,887 | ||||||
Common stock issuances (shares) | 1,445,400 | 1,445,400 | ||||||||
Common stock repurchases | $ (2,681) | (283,862) | (286,543) | $ (286,543) | ||||||
Common stock repurchases (in shares) | (268,070) | |||||||||
Share based compensation | $ 2,100 | 231,000 | 233,100 | 233,100 | ||||||
Share based compensation (shares) | 210,000 | |||||||||
Dividends and distributions | (1,014,048) | (1,014,048) | (41,200) | (48,600) | (12,812) | (1,116,660) | ||||
Net (loss) income | (3,758,629) | (3,758,629) | 15,421 | 31,027 | (20,275) | (3,732,456) | ||||
Balance at Sep. 30, 2022 | $ 174,399 | 51,116,997 | (3,350,946) | (29,754,023) | 18,186,427 | 120,824 | 482,636 | 844,830 | 19,634,717 | |
Balance (shares) at Sep. 30, 2022 | 17,439,947 | |||||||||
Balance at Jun. 30, 2022 | $ 174,399 | 51,116,997 | (3,350,946) | (27,650,766) | 20,289,684 | 137,156 | 474,854 | 864,027 | 21,765,721 | |
Balance (shares) at Jun. 30, 2022 | 17,439,947 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Common stock repurchases | $ 0 | 0 | ||||||||
Dividends and distributions | (348,799) | (348,799) | (24,800) | (9,000) | (4,271) | (386,870) | ||||
Net (loss) income | (1,754,458) | (1,754,458) | 8,468 | 16,782 | (14,926) | (1,744,134) | ||||
Balance at Sep. 30, 2022 | $ 174,399 | $ 51,116,997 | $ (3,350,946) | $ (29,754,023) | $ 18,186,427 | $ 120,824 | $ 482,636 | $ 844,830 | $ 19,634,717 | |
Balance (shares) at Sep. 30, 2022 | 17,439,947 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (3,732,456) | $ (3,824,032) |
Adjustments to reconcile consolidated net loss to net cash flows from operating activities | ||
Depreciation | 2,471,365 | 1,665,203 |
Amortization | 1,037,800 | 696,011 |
Loan cost amortization | 80,607 | 80,711 |
Mandatorily redeemable preferred stock issuance cost and discount amortization | 165,338 | 151,616 |
Convertible debenture issuance cost, discount and beneficial conversion feature amortization | 1,718,487 | |
Above (below) market lease amortization, net | (146,068) | (2,350) |
Bad debt expense | 12,946 | 26,014 |
Note payable forgiveness | (176,300) | |
Share-based compensation | 233,100 | 149,981 |
Impairment of assets held for sale | 175,671 | 0 |
Loss on impairment | 36,670 | |
Loss on extinguishment of debt | 389,207 | |
Loss (gain) on sale of investment property | 389,471 | (124,641) |
Changes in assets and liabilities | ||
Rent and other receivables, net | 211,376 | 53,240 |
Unbilled rent | (112,767) | (164,977) |
Other assets | (147,130) | (91,849) |
Accounts payable and accrued liabilities | 608,351 | 485,387 |
Net cash flows from operating activities | 1,673,481 | 642,501 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Investment property acquisitions | (10,279,714) | (13,152,547) |
Capital expenditures | (651,653) | (283,018) |
Cash received from disposal of investment properties | 2,011,462 | 2,144,529 |
Net cash flows from investing activities | (8,919,905) | (11,291,036) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Dividends and distributions paid | (1,116,660) | (711,899) |
Cash paid for lender fees associated with Clemson Best Western sale | (84,900) | |
Repayment of line of credit, short term | (325,000) | |
Proceeds from mortgages payable, net | 18,477,304 | 6,421,870 |
Repayment of mortgages payable | (11,692,557) | (437,662) |
Proceeds from sale of convertible debentures, net of capitalized offering costs | 1,305,000 | |
Proceeds from sales of common stock, net of capitalized offering costs | 1,538,887 | 10,826,920 |
Repurchases of common stock, including costs and fees | (286,543) | |
Net cash flows from financing activities | 6,835,531 | 17,079,229 |
(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (410,893) | 6,430,694 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 7,383,977 | 5,096,928 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | $ 6,973,084 | $ 11,527,622 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - Supplemental cash flow information - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Additional Cash Flow Elements and Supplemental Disclosures and Non-Cash Activities | ||
CASH AND CASH EQUIVALENTS, end of period, shown in condensed consolidated balance sheets | $ 4,863,963 | $ 8,526,063 |
RESTRICTED CASH including assets restricted for capital and operating reserves and tenant deposits, end of period, shown in condensed consolidated balance sheets | 2,109,121 | 3,001,559 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period shown in the condensed consolidated statements of cash flows | 6,973,084 | 11,527,622 |
Other cash transactions: | ||
Interest paid | 2,508,654 | 2,658,218 |
Non-cash transactions: | ||
Release of restricted cash related to sale of Clemson Best Western Property | 1,455,777 | |
Capital expenditures accrued as of September 30, 2022 | $ 269,246 | |
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 | |
Transfer of other assets to investment properties, net | 384,882 | |
Forgiveness of note payable | $ 176,300 |
Organization and Basis of Prese
Organization and Basis of Presentation and Consolidation | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022, 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, a 73,440 square foot retail property located in Mechanicsville, Virginia (the “Hanover Square Property”), the Ashley Plaza Shopping Center, a 164,012 square foot retail property located in Goldsboro, North Carolina (the “Ashley Plaza Property”), a 64,880 square foot mixed-use industrial/office property located in Greenville, South Carolina (the “Brookfield Center Property”), the Lancer Center, a 181,590 square foot retail property located in Lancaster, South Carolina (the “Lancer Center Property”), the Greenbrier Business Center, an 89,280 square foot mixed-use industrial/office property located in Chesapeake, Virginia (the “Greenbrier Business Center Property "), the Parkway Property, a 64,109 square foot mixed-use industrial office property located in Virginia Beach, Virginia (the "Parkway Property") and the Salisbury Marketplace Shopping Center, a 79,732 square foot retail property located in Salisbury, North Carolina (the “Salisbury Marketplace 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 condensed 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, for the periods prior to September 30, 2022, the taxable REIT subsidiary which formerly operated the Clemson Best Western Property, and, for periods prior to December 31, 2021, the taxable REIT subsidiary which 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 leased its condensed consolidated hotel properties to taxable REIT subsidiaries (“TRS”) for federal income tax purposes. The TRS subsidiaries were subject to income tax and were not limited as to the amount of nonqualifying income they could generate, but the Company’s TRS subsidiaries were limited in terms of their value as a percentage of the total value of the Company’s assets. The Company’s TRS subsidiaries entered into agreements with a third party to manage the operations of the hotel. The Company prepared the accompanying condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). References to the condensed consolidated financial statements and references to individual financial statements included herein, reference the condensed consolidated financial statements or the respective individual financial statement. All material balances and transactions between the condensed 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 the discretion of Medalist Fund Manager, Inc. (the “Manager”), its Manager. The Company is externally managed by 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 | 9 Months Ended |
Sep. 30, 2022 | |
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. Capitalized leasing commissions and tenant improvements incurred and paid by the Company subsequent to the acquisition of the investment property 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. Other than the tenant-specific losses 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 three and nine months ended September 30, 2022 and 2021, that would result in the projected value being below the carrying value of the Company’s properties. During the nine months ended September 30, 2022, two tenants defaulted on their leases and abandoned their premises. The Company determined that the carrying value of certain intangible assets and liabilities associated with these leases that were recorded as part of the purchase of the these properties should be written off. As a result, the Company recorded a loss on impairment of $36,670 for the nine months ended September 30, 2022. No such tenant-related loss on impairment was recorded during the three months ended September 30, 2022, or during the three and nine months ended September 30, 2021. Assets Held for Sale The Company may decide to sell properties that are held as investment properties. The accounting treatment for the disposal of long-lived assets is covered by ASC 360. Under this guidance, the Company records the assets associated with 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. Delays in the time required to complete a sale do not preclude a long-lived asset from continuing to be classified as held for sale beyond the initial one year period if the delay is caused by events or circumstances beyond an entity’s control and there is sufficient evidence that the entity remains committed to a qualifying plan to sell the long-lived asset. 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. During February 2021, the Company committed to a plan for the sale of an asset group associated with the Clemson Best Western Hotel Property that included the land, site improvements, building, building improvements and furniture, fixtures and equipment. As of March 31, 2021, the Company recorded this asset group, and the associated mortgage payable, as held for sale. As of March 31, 2021, the date the Company originally recorded this asset group as held for sale, the Company determined that the fair value of the Clemson Best Western Property exceeded the carrying value of its asset group, and the Company did not record impairment of assets held for sale associated with this asset group. During subsequent periods since the asset group associated with the Clemson Best Western Property were initially classified as held for sale, the Company has continued to follow its disposal plan. Under ASC 360, during subsequent reporting periods after the asset group is classified as held for sale, it is necessary to evaluate the amounts previously used for the estimated fair value of the asset group. Up to and including the reporting periods ending December 31, 2021, the Company reviewed and reassessed the estimated fair value of the asset group and believed that the fair value, less estimated costs to sell, exceeds the Company’s carrying cost in the property. Accordingly, the Company did not record impairment of assets held for sale related to the Clemson Best Western Property for the year ended December 31, 2021. As of March 31, 2022, the Company determined that the carrying value of the asset group associated with the Clemson Best Western Hotel Property exceeded its fair value, less estimated costs to sell, and recorded impairment of assets held for sale of $175,671 on its condensed consolidated statement of operations for the nine months ended September 30, 2022. No such impairment of assets held for sale was recorded during the three and nine months ended September 30, 2021. On September 29, 2022, the Company closed on the sale of the Clemson Best Western Hotel Property to an unaffiliated purchaser. See Note 3 for additional details. 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. During the nine months ended September 30, 2022, two tenants defaulted on their leases and abandoned their premises. The Company determined that the book value of the intangible assets and liabilities, net, associated with these leases of $36,670 that were recorded as part of the purchase of these properties should be written off. This amount is included in the loss on impairment reported on the Company’s condensed consolidated statement of operations for the nine months ended September 30, 2022. No such loss on impairment was recorded for the three months ended September 30, 2022 or for the three and nine months ended September 30, 2021. 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: September 30, 2022 (unaudited) December 31, 2021 Intangible Assets Leasing commissions $ 1,196,385 $ 1,153,736 Legal and marketing costs 187,197 163,019 Above market leases 239,375 360,509 Net leasehold asset 2,443,038 2,523,128 $ 4,065,995 $ 4,200,392 Intangible Liabilities Below market leases $ (2,344,281) $ (1,880,612) 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 nine months ended September 30, 2022 and 2021, respectively, were as follows: For the three months ended For the nine months ended September 30, September 30, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (unaudited) Amortization of above market leases $ (33,862) $ (67,206) $ (159,388) $ (180,803) Amortization of below market leases 115,679 73,174 305,456 183,153 $ 81,817 $ 5,968 $ 146,068 $ 2,350 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 three and nine months ended September 30, 2022 and 2021, respectively, were as follows: For the three months ended For the nine months ended September 30, September 30, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (unaudited) Leasing commissions $ (62,882) $ (54,798) $ (185,331) $ (146,473) Legal and marketing costs (18,533) (9,738) (48,000) (23,620) Net leasehold asset (242,877) (211,399) (804,469) (525,918) $ (324,292) $ (275,935) $ (1,037,800) $ (696,011) As of September 30, 2022 and December 31, 2021, the Company’s accumulated amortization of lease origination costs, leases in place and legal and marketing costs totaled $2,148,833 and $2,779,370, respectively. During the three and nine months ended September 30, 2022, the Company wrote off $166,029 and $1,663,228, respectively, in accumulated amortization related to fully amortized intangible assets and $0 and $5,108, respectively, in accumulated amortization related to the write off of assets related to the tenant defaults, discussed above. Future amortization of above and below market leases, lease origination costs, leases in place, legal and marketing costs and tenant relationships is as follows: For the remaining three months ending December 31, 2022 2023 2024 2025 2026 2027-2041 Total Intangible Assets Leasing commissions $ 60,963 $ 219,221 $ 173,352 $ 145,550 $ 107,312 $ 489,987 $ 1,196,385 Legal and marketing costs 17,759 61,506 39,837 24,004 13,160 30,931 187,197 Above market leases 29,515 97,960 45,608 21,526 15,629 29,137 239,375 Net leasehold asset 209,049 623,930 400,511 295,851 199,466 714,231 2,443,038 $ 317,286 $ 1,002,617 $ 659,308 $ 486,931 $ 335,567 $ 1,264,286 $ 4,065,995 Intangible Liabilities Below market leases, net $ (110,169) $ (368,802) $ (285,892) $ (213,348) $ (178,776) $ (1,187,294) $ (2,344,281) 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 three and nine months ended September 30, 2022 and 2021, 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 September 30, 2022, the Company held three cash accounts with an aggregate balance that exceeded the FDIC limit by $3,306,551. As of December 31, 2021, the Company held five cash accounts with an aggregate balance that exceeded the FDIC limit by $2,377,633. 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 September 30, 2022 and December 31, 2021, the Company reported $266,837 and $222,265, 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 September 30, 2022 and December 31, 2021, the Company reported $897,434 and $1,523,837, respectively, in escrow deposits. Capital reserves are restricted cash balances held by lenders for capital improvements, leasing commissions furniture, fixtures and equipment, and tenant improvements. As of September 30, 2022 and December 31, 2021, the Company reported $944,850 and $1,267,470, respectively, in capital property reserves. September 30, 2022 December 31, (unaudited) 2021 Property and Purpose of Reserve Clemson Best Western Property - improvements $ — $ 50,012 Clemson Best Western Property - furniture, fixtures and equipment — 275,109 Franklin Square Property - leasing costs 815,561 700,000 Brookfield Center Property - maintenance reserve 129,289 92,349 Greenbrier Business Center - capital reserve — 150,000 Total $ 944,850 $ 1,267,470 Share Retirement ASC 505-30-30-8 provides guidance on accounting for share retirement and establishes two alternative methods for accounting for the repurchase price paid in excess of par value. The Company has elected the method by which the excess between par value and the repurchase price, including costs and fees, is recorded to additional paid in capital on the Company’s condensed consolidated balance sheets. During the nine months ended September 30, 2022, the Company repurchased 268,070 shares of its common stock at a total cost of $278,277 at an average price of $1.038 per common share. The Company incurred fees of $8,266 associated with these transactions. Of the total repurchase price, $2,681 was recorded to common stock and the difference, $283,862, was recorded to additional paid in capital on the Company’s condensed consolidated balance sheet. No such amounts were recorded during the three months ended September 30, 2022 or during the three and nine months ended September 30, 2021. 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 condensed consolidated balance sheets. As of September 30, 2022 and December 31, 2021, the Company reported $985,089 and $872,322, 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 condensed consolidated statements of operations under the captions "Retail center property revenues” and “Flex center property tenant revenues.” (See Recent Accounting Pronouncements, below.) 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. Since these differences are determined annually under the leases and accrued as of December 31 in the year earned, no such revenues were recognized during the three and nine months ended September 30, 2022 and 2021. The Company recognizes lease termination fees in the period that the lease is terminated and collection of the fees is reasonably assured. Upon early lease termination, the Company provides for losses related to unrecovered intangibles and other assets. During the three and nine months ended September 30, 2022 and 2021, respectively, no such termination fees were recognized. Hotel Property Revenues Hotel revenues from the Clemson Best Western Property (and for prior year periods, the Hampton Inn 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 Clemson University occupancy agreement ended on May 15, 2022. The Clemson Best Western Property (and for prior year periods, the Hampton Inn Property) is 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 Clemson Best Western Property has a legal obligation to act as a collection agent. The Clemson Best Western Property does not retain these taxes and fees; therefore, they are not included in revenues. The Clemson Best Western Property records 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 Clemson Best Western Property (and in prior year periods, the Hampton Inn 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 Clemson Best Western Property, total amounts incurred for payroll salaries and wages, payroll taxes and other employee benefits for the three and nine months ended September 30, 2022 were $198,024 and $469,839, respectively, and for the three and nine months ended September 30, 2021 were $119,345 and $339,863 , respectively and for the three and nine months ended September 30, 2021 were $250,724 and $622,844 , respectively 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 September 30, 2022 and December 31, 2021, the Company’s allowance for uncollectible rent totaled $18,219 and $13,010, 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 September 30, 2022 and December 31, 2021, 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 three and nine months ended September 30, 2022 , , 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 condensed consolidated financial statements, and revenues and expenses during the reported period. The Company’s actual results could differ from these estimates. Noncontrolling Interests The ownership interests not held by the REIT are considered noncontrolling interests. There are four elements of noncontrolling interests in the capital structure of the Company. These noncontrolling interests have been reported in equity on the condensed consolidated balance sheets but separate from the Company’s equity. On the condensed consolidated statements of operations, the subsidiaries are reported at the condensed consolidated amount, including both the amount attributable to the Company and noncontrolling interests. The Company’s condensed 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, which the Company and the noncontrolling owner sold on August 31, 2021. Prior to its sale, the Hampton Inn Property’s net income (loss) was allocated to the noncontrolling ownership interest based on its percent ownership. During the three and nine months ended September 30, 2021, 22 percent of the Hampton Inn’s net income of $7,224 and $90,202 , respectively, or respectively No such allocation was necessary during the three and nine months ended September 30, 2022 due to the sale of the property on August 31, 2021. 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 income (loss) is allocated to the noncontrolling ownership interest based on its 16 percent ownership. During the three and nine months ended September 30, 2022, 16 percent of the Hanover Square Property’s net income of $52,923 and $96,382 , respectively, or and $15,421 , respectively $89,996 , respectively, and $14,398 , respectively, 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 income is allocated to the noncontrolling ownership interest based on its 18 percent ownership. During the three and nine months ended September 30, 2022, 18 percent of the Parkway Property's net income of $93,231 and $172,368 , respectively, and $31,027 , respectively 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 September 30, 2022, there were 213,531 Operating Partnership units outstanding. The Operating Partnership units not held by the REIT represent 1.21 percent and 1.31 percent of the outstanding Operating Partnership units as of September 30, 2022 and December 31, 2021, 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 three and nine months ended September 30, 2022, a weighted average of 1.21 and 1.21 percent of the Operating Partnership’s net loss of $1,233,543 and $1,671,091 , respectively, or $14,926 and $20,275 , respectively was allocated to the noncontrolling unit holders. During the three and nine months ended September 30, 2021, a weighted average of 1.31 and 2.05 percent, respectively, of the Operating Partnership’s net (loss) income of ( $34,331 ) and $147,189 , respectively, or ( $450 ) and $3,023 , respectively, was allocated to the noncontrolling unit holders. 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 2016-02, Leases (Topic 842) Leases significant provisions of this standard include (i) defining the “lease term” to include the non-cancelable period together with periods for which there is a significant economic incentive for the lessee to extend or not terminate the lease; (ii) defining the initial lease liability 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 2016-0 |
Investment Properties
Investment Properties | 9 Months Ended |
Sep. 30, 2022 | |
Investment Properties | |
Investment Properties | 3. Investment Properties Investment properties consist of the following: September 30, 2022 December 31, (unaudited) 2021 Land $ 16,526,436 $ 14,142,555 Site improvements 4,719,926 4,431,338 Buildings and improvements (1) 64,609,952 57,322,242 Investment properties at cost (2) 85,856,314 75,896,135 Less accumulated depreciation 8,529,883 6,488,220 Investment properties, net $ 77,326,431 $ 69,407,915 (1) Includes tenant improvements (both those acquired at the acquisition and those constructed after the acquisition), capitalized leasing commissions and other capital costs incurred post-acquisition. (2) 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 $907,221 and $2,471,365 for the three and nine months ended September 30, 2022 and $661,669 and $1,665,203 for the three and nine months ended September 30, 2021, respectively Capitalized tenant improvements The Company carries two categories of capitalized tenant improvements on its condensed consolidated balance sheets, both of which are recorded under investment properties, net on the Company’s condensed consolidated balance sheets. The first category is the allocation of acquisition costs to tenant improvements that is recorded on the Company’s condensed 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 condensed consolidated balance sheets. Depreciation expense on both categories of tenant improvements is recorded as a component of depreciation expense on the Company’s condensed 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: September 30, 2022 December 31, (unaudited) 2021 Capitalized tenant improvements – acquisition cost allocation, net $ 3,359,767 $ 1,840,612 Capitalized tenant improvements incurred subsequent to acquisition, net 349,317 257,340 During the three and nine months ended September 30, 2022, the Company recorded $97,858 and $159,941, respectively, in capitalized tenant improvements. During the three and nine months ended September 30, 2021, the Company recorded $87,229 and $132,379 , respectively, in capitalized tenant improvements. Depreciation of capitalized tenant improvements incurred subsequent to acquisition was $23,968 and $67,964 for the three and nine months ended September 30, 2022, respectively and $18,587 and $45,446 for the three and nine months ended September 30, 2021, respectively Depreciation of capitalized tenant improvements arising from the acquisition cost allocation was $185,144 and $441,594 for the three and nine months ended September 30, 2022, respectively and $103,229 and $247,189 for the three and nine months ended September 30, 2021, respectively Capitalized leasing commissions The Company carries two categories of capitalized leasing commissions on its condensed 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 condensed 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 condensed 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: September 30, 2022 December 31, (unaudited) 2021 Capitalized leasing commissions, net $ 508,906 $ 356,327 During the three and nine months ended September 30, 2022, the Company recorded $24,195 and $223,958, respectively in capitalized leasing commissions. During the three and nine months ended September 30, 2021, the Company recorded $33,537 and $45,422, respectively in capitalized leasing commissions. Depreciation of capitalized leasing commissions was $26,942 and $71,379 for the three and nine months ended September 30, 2022, respectively. Depreciation on capitalized leasing commissions was $17,012 and $47,340 for the three and nine months ended September 30, 2021, 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 condensed 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. As of September 30, 2022 and December 31, 2021, assets held for sale and liabilities associated with assets held for sale consisted of the following: September 30, 2022 December 31, (unaudited) 2021 Investment properties, net $ — $ 9,846,208 Total assets held for sale $ — $ 9,846,208 September 30, 2022 December 31, (unaudited) 2021 Mortgages payable, net $ — $ 7,615,368 Total liabilities associated with assets held for sale $ — $ 7,615,368 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 continued to classify the Clemson Best Western Hotel Property asset group and the related mortgage payable, net, as assets held for sale and liabilities associated with assets held for sale, respectively, until the Company closed on the sale of the Clemson Best Western Hotel Property on September 29, 2022. Sale of investment properties On September 29, 2022, the Company sold the Clemson Best Western Hotel Property to an unrelated third party for a sale price of $10.015 million, resulting in a loss on sale of investment properties of $389,471 reported on the Company's condensed consolidated statement of operations for the three and nine months ended September 30, 2022. 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 condensed consolidated statement of operations for the three and nine months ended September 30, 2021. The Company reports properties that have been either previously disposed or that are currently held for sale in continuing operations in the Company's condensed 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 Clemson Best Western Hotel Property and the Hampton Inn 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 Clemson Best Western Hotel Property and the Hampton Inn Property, which are included in continuing operations, are as follows: For the three months ended For the nine months ended September 30, September 30, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (unaudited) Hotel property room revenues $ 376,560 $ 1,262,406 $ 1,494,836 $ 3,970,548 Hotel property other revenues 2,749 17,932 12,813 38,493 Total Revenue 379,309 1,280,338 1,507,649 4,009,041 Hotel property operating expenses 589,311 960,994 1,302,114 2,733,578 Depreciation and amortization — — — — Total Operating Expenses 589,311 960,994 1,302,114 2,733,578 (Loss) gain on disposal of investment properties (389,471) 124,641 (389,471) 124,641 Operating (Loss) Income (599,473) 443,985 (183,936) 1,400,104 Interest expense 147,589 260,043 426,757 924,339 Net (Loss) Income from Operations (747,062) 183,942 (610,693) 475,765 Other expense (172) (201) (48) (190) Net (Loss) Income (747,234) 183,741 (610,741) 475,575 Net income attributable to Hampton Inn Property noncontrolling interests — 1,590 — 19,845 Net (loss) income attributable to Operating Partnership noncontrolling interests (11,697) 2,387 (12,040) 12,329 Net Loss (Income) Attributable to Medalist Common Shareholders $ (735,537) $ 179,764 $ (598,701) $ 443,401 2022 Property Acquisitions Salisbury Marketplace Property Fair value of assets acquired: Investment property (a) $ 9,963,258 Lease intangibles and other assets (b) 1,045,189 Above market leases (b) 40,392 Below market leases (b) (769,125) Fair value of net assets acquired (c) $ 10,279,714 Purchase consideration: Consideration paid with cash (d) $ 3,746,561 Consideration paid with new mortgage debt, net (e) 6,533,153 Total consideration (f) $ 10,279,714 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 the total fair value of assets and liabilities acquired at closing. d. 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. e. Represents allocation of the Wells Fargo Mortgage Facility proceeds used to fund the purchase of the Salisbury Marketplace Property, net of $18,847 in capitalized loan issuance costs. See Note 5, below. f. Represents the consideration paid for the fair value of the assets and liabilities acquired. 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 September 30, 2022 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 Manager. The Greenbrier Business Center Property, built in 1987, was 85 percent leased as of September 30, 2022. 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. Lancer Greenbrier Center Business Center Property Property Total Fair value of assets acquired: Investment property (a) $ 9,902,876 $ 6,896,803 $ 16,799,679 Lease intangibles and other assets (b) 1,023,753 583,940 1,607,693 Restricted cash acquired (c) — 150,000 150,000 Above market leases (b) 157,438 48,186 205,624 Below market leases (b) (878,682) (100,167) (978,849) Fair value of net assets acquired (d) $ 10,205,385 $ 7,578,762 $ 17,784,147 Purchase consideration: Consideration paid with cash (e) $ 3,783,515 $ 3,097,162 $ 6,880,677 Consideration paid with new mortgage debt, net (f) 6,421,870 — 6,421,870 Consideration paid with assumed mortgage debt, net (g) — 4,481,600 4,481,600 Total consideration (h) $ 10,205,385 $ 7,578,762 $ 17,784,147 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. Issuance of new mortgage debt to fund the purchase of the Lancer Center Property, net of capitalized loan issuance costs. See Note 5, below. g. Assumption of mortgage debt related to the purchase of the Greenbrier Business Center Property. See Note 5, below. h. Represents the consideration paid for the fair value of the assets and liabilities acquired. |
Mandatorily Redeemable Preferre
Mandatorily Redeemable Preferred Stock | 9 Months Ended |
Sep. 30, 2022 | |
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 condensed 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 ,” which states that mandatorily redeemable financial instruments should be classified as liabilities and therefore the related dividend payments are treated as a component of interest expense in the accompanying condensed consolidated statements of operations (see Note 5, below, for a discussion of interest expense associated with the 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 April 21, 2022 April 18, 2022 0.50 January 20, 2022 - April 20, 2022 July 21, 2022 July 18, 2022 0.50 April 21, 2022 - July 20, 2022 October 20, 2022 October 17, 2022 0.50 July 21, 2022 - October 19, 2022 As of September 30, 2022 and December 31, 2021, 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 condensed 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 condensed 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 $56,311 and $165,338 were included in interest expense for the three and nine months ended September 30, 2022, respectively, and $51,637 and $151,616 were included in interest expense for the three and nine months ended September 30, 2021, respectively, in the accompany ing condensed consolidated statements of operations. Accumulated amortization of the discount and deferred financing costs was $532,096 and $366,758 as of September 30, 2022 and December 31, 2021, respectively. |
Loans Payable
Loans Payable | 9 Months Ended |
Sep. 30, 2022 | |
Loans Payable | |
Loans Payable | 5. Loans Payable Mortgages Payable The Company’s mortgages payables, net consists of the following: September 30, Monthly Interest 2022 December 31, Property Payment Rate Maturity (unaudited) 2021 Franklin Square (a) Interest only 3.808 % December 2031 $ 13,250,000 $ 13,250,000 Hanover Square (b) $ 56,882 4.25 % December 2027 9,943,087 10,134,667 Ashley Plaza (c) $ 52,795 3.75 % September 2029 10,966,333 11,127,111 Brookfield Center (d) $ 22,876 3.90 % November 2029 4,685,210 4,758,344 Parkway Center (e) $ 19,720 Variable October 2026 5,010,286 5,090,210 Wells Fargo Facility (f) $ 103,438 4.50 % June 2027 18,450,515 — Lancer Center (g) — 6,488,034 Greenbrier Business Center (h) — 4,495,000 Unamortized issuance costs, net (752,580) (825,544) Total mortgages payable, net $ 61,552,851 $ 54,517,822 (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 under 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 September 30, 2022 and December 31, 2021, the Company believes that it is compliant with these covenants. (b) The mortgage loan for the Hanover Square Property bears interest at 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 of $56,882 which includes interest at the fixed rate, and principal, based on a 25 year amortization schedule. 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 September 30, 2022 and December 31, 2021, 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 30 year amortization schedule. (d) 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 30 year amortization schedule. (e) 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 September 30, 2022 and December 31, 2021, the rate in effect for the Parkway Property mortgage was 4.814 percent and 2.3493 percent, respectively. 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. (f) On June 13, 2022, the Company entered into a mortgage loan facility with Wells Fargo Bank (the “Wells Fargo Mortgage Facility”) in the principal amount of $18,609,500 . The proceeds of this mortgage were used to finance the acquisition of the Salisbury Marketplace Property and to refinance the mortgages payable on the Lancer Center Property and the Greenbrier Business Center Property (see notes (g) and (h), below). The Wells Fargo Mortgage Facility bears interest at a fixed rate of 4.50 percent for a five year term. The monthly payment, which includes interest at the fixed rate, and principal, based on a 25 year amortization schedule, is $103,438 . The Company has provided an unconditional guaranty of the payment of and performance under the terms of the Wells Fargo Mortgage Facility. The Wells Fargo Mortgage Facility credit agreement includes covenants to maintain a debt service coverage ratio of not less than 1.50 to 1.00 on an annual basis, a minimum debt yield of 9.5 percent on the Salisbury Marketplace, Lancer Center and Greenbrier Business Center properties, and the maintenance of liquid assets of not less than $1,500,000 . As of September 30, 2022, the Company believes that it is compliant with these covenants. (g) On June 13, 2022, the Company refinanced the mortgage loan for the Lancer Center Property, using proceeds from the Wells Fargo Facility discussed above. The Company accounted for this refinancing transaction under debt extinguishment accounting in accordance with ASC 470, and for the three and nine months ended September 30, 2022, recorded a loss on extinguishment of debt of $0 and $113,282 , respectively. The original mortgage loan for the Lancer Center Property bore interest at a fixed rate of 4.00 percent. The monthly payment was $34,667 which included interest at the fixed rate and principal, based on a twenty-five year amortization schedule. (h) On June 13, 2022, the Company refinanced the mortgage loan for the Greenbrier Business Center Property, using proceeds from the Wells Fargo Facility discussed above. The Company accounted for this refinancing transaction under debt extinguishment accounting in accordance with ASC 470, and for the three and nine months ended September 30, 2022, recorded a loss on extinguishment of debt of $0 and $56,393 , respectively. The Company assumed the original mortgage loan for the Greenbrier Business Center Property from the seller. The original mortgage loan bore interest at a fixed rate of 4.00 percent and would have been interest only until August 1, 2022, at which time the monthly payment would have become $23,873 , which would have included interest at the fixed rate, and principal, based on a twenty-five year amortization schedule. Interest rate protection transaction On October 28, 2021, the Company entered into an Interest Rate Protection Transaction to limit the Company’s exposure to increases in interest rates on the variable rate mortgage loan on the Parkway Property. Under this agreement, the Company’s interest rate exposure is capped at 5.25 percent if USD 1-Month ICE LIBOR exceeds 3 percent. USD 1-Month ICE LIBOR was 3.143 percent and 0.102 percent as of September 30, 2022 and December 31, 2021, respectively. In accordance with the guidance on derivatives and hedging, the Company records all derivatives on the balance sheet at fair value under other assets. 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 September 30, 2022 and December 31, 2021, respectively, the fair value of the interest Rate Protection Transaction, based on level 1 inputs, was $283,461 and $37,350. The Company reports changes in the fair value of the derivative as a decrease (increase) in fair value-interest rate cap on its consolidated statements of operations. 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: Balance September 30, Monthly Interest 2022 December 31, Property Payment Rate Maturity (unaudited) 2021 Clemson Best Western (a) Interest only Variable October 2022 — 7,750,000 Unamortized issuance costs, net — (134,632) Total mortgages payable, net, associated with assets held for sale $ — $ 7,615,368 (a.) 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 bore interest at a variable rate based on LIBOR with a minimum rate of 7.15 percent . The interest rate payable was the USD LIBOR one-month rate plus 4.9 percent. As of September 30, 2022 and December 31, 2021, respectively, the rate in effect for the Clemson Best Western Property mortgage was 7.15 percent. On September 29, 2022, the Company sold the Clemson Best Western Property and repaid the Clemson Best Western Property mortgage payable. The Company accounted for the repayment of the mortgage payable under debt extinguishment accounting in accordance with ASC 470. During the three months ended September 30, 2022, the Company recorded a loss on extinguishment of debt of $219,532 , consisting of $84,900 in fees paid to the lender and a write off of $134,632 of unamortized loan issuance costs. During the three and nine months ended September 30, 2022, the Company incurred $227,164 in expenses related to its efforts to refinance the Clemson Best Western Property mortgage payable in anticipation of its October 6, 2022 maturity, had the Company not successfully closed on the sale of the Clemson Best Western Property on September 29, 2022. These expenses for lender fees and other third-party costs are recorded as other expenses on the Company’s condensed consolidated statement of operations for the three and nine months ended September 30, 2022. No such expenses were recorded during the three and nine months ended September 30, 2021. Wells Fargo Line of Credit 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 condensed 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. Between January 6, 2021 and May 11, 2021, the convertible debenture holder completed the full conversion of 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 in a series of 17 conversions at an average conversion price of $1.59 per common share. Interest expense Interest expense, including amortization of capitalized issuance costs consists of the following: For the three months ended September 30, 2022 (unaudited) Amortization Mortgage of discounts and Other Interest capitalized interest Expense issuance costs expense Total Franklin Square mortgage $ 128,943 $ 7,093 $ — $ 136,036 Hanover Square mortgage 108,222 3,223 — 111,445 Hampton Inn mortgage — — — — Ashley Plaza mortgage 105,438 4,357 — 109,795 Clemson Best Western mortgage 146,507 — 1,082 147,589 Brookfield Center mortgage 46,844 2,838 — 49,682 Parkway Center mortgage 56,023 2,757 — 58,780 Wells Fargo Mortgage Facility 212,895 6,722 — 219,617 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 56,311 100,000 156,311 Total interest expense $ 804,872 $ 83,301 $ 101,082 $ 989,255 For the three months ended September 30, 2021 (unaudited) Amortization Mortgage of discounts and Other Interest capitalized interest Expense issuance costs expense Total Franklin Square mortgage $ 171,458 $ 2,317 $ — $ 173,775 Hanover Square mortgage 108,571 3,223 — 111,794 Hampton Inn mortgage 116,422 — 1,655 118,077 Ashley Plaza mortgage 107,459 4,358 — 111,817 Clemson Best Western mortgage 141,609 — 357 141,966 Brookfield Center mortgage 47,708 2,838 — 50,546 Lancer Center mortgage 65,959 7,156 — 73,115 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 51,637 100,000 151,637 Other interest — — 332 332 Total interest expense $ 776,666 $ 71,760 $ 102,344 $ 950,770 For the nine months ended September 30, 2022 (unaudited) Amortization Mortgage of discounts and Other Interest capitalized interest Expense issuance costs expense Total Franklin Square mortgage $ 382,625 $ 21,279 $ — $ 403,904 Hanover Square mortgage 319,640 9,668 — 329,308 Hampton Inn mortgage — — — — Ashley Plaza mortgage 314,378 13,072 — 327,450 Clemson Best Western mortgage 425,109 — 1,648 426,757 Brookfield Center mortgage 139,646 8,513 — 148,159 Lancer Center mortgage 115,179 11,928 — 127,107 Greenbrier Business Center mortgage 81,409 1,155 — 82,564 Parkway Center mortgage 124,490 8,270 — 132,760 Wells Fargo Mortgage Facility 254,766 6,722 — 261,488 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 165,338 300,000 465,338 Total interest expense $ 2,157,242 $ 245,945 $ 301,648 $ 2,704,835 For the nine months ended September 30, 2021 (unaudited) Amortization Mortgage of discounts and Other Interest capitalized interest Expense issuance costs expense Total Franklin Square mortgage $ 508,783 $ 6,961 $ — $ 515,744 Hanover Square mortgage 328,636 9,680 — 338,316 Hampton Inn mortgage 456,300 9,000 10,544 475,844 Ashley Plaza mortgage 320,316 13,074 — 333,390 Clemson Best Western mortgage 420,211 22,437 5,847 448,495 Brookfield Center mortgage 142,188 8,514 — 150,702 Lancer Center mortgage 100,493 10,814 — 111,307 Greenbrier Business Center mortgage 17,480 231 — 17,711 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 151,616 300,000 451,616 Amortization and interest on convertible debentures — 1,718,487 42,486 1,760,973 Other interest — — 5,100 5,100 Total interest expense $ 2,294,407 $ 1,950,814 $ 363,977 $ 4,609,198 Interest accrued and accumulated amortization of capitalized issuance costs consist of the following: As of September 30, 2022 (unaudited) As of December 31, 2021 Accumulated Accumulated amortization of amortization capitalized Accrued of capitalized Accrued interest issuance costs interest issuance costs Franklin Square mortgage $ 42,046 $ 23,643 $ — $ 2,364 Hanover Square mortgage 37,562 56,658 38,287 46,990 Ashley Plaza mortgage — 53,752 — 40,679 Clemson Best Western mortgage — — 47,716 134,622 Brookfield Center mortgage — 34,055 15,979 25,542 Lancer Center mortgage — — 22,042 17,971 Greenbrier Business Center mortgage — — 15,482 924 Parkway Center mortgage 20,100 10,108 9,966 1,838 Wells Fargo Mortgage Facility — 6,722 — — Amortization and accrued preferred stock dividends (1) on mandatorily redeemable preferred stock 70,004 532,096 70,004 366,758 Total $ 169,712 $ 717,034 $ 219,476 $ 637,688 (1) Recorded as accrued interest under accounts payable and accrued liabilities on the Company’s condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021, respectively. Debt Maturity The Company’s scheduled principal repayments on indebtedness as of September 30, 2022 are as follows: For the remaining three months ending December 31, 2022 $ 269,798 2023 1,101,643 2024 1,142,095 2025 1,429,359 2026 1,488,466 Thereafter 56,874,070 Total principal payments and debt maturities 62,305,431 Less unamortized issuance costs (752,580) Net principal payments and debt maturities $ 61,552,851 |
Rentals under Operating Leases
Rentals under Operating Leases | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022 are as follows: For the remaining three months ending December 31, 2022 $ 1,968,016 2023 7,533,437 2024 6,181,843 2025 5,295,766 2026 3,795,021 Thereafter 10,193,285 Total minimum rents $ 34,967,368 |
Equity
Equity | 9 Months Ended |
Sep. 30, 2022 | |
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 98.79% and 98.69% interest in the Operating Partnership as of September 30, 2022 and December 31, 2021, 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-3 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 condensed consolidated balance sheet as of September 30, 2022 and December 31, 2021 , respectively. 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 September 30, 2022, the Company has generated net proceeds of $1,538,887 from the issuance of 1,445,400 shares at an average price of $1.065 per common share under the SEPA. Issuance Date Shares Issued Price Per Share Total Proceeds March 3, 2022 90,600 $ 1.088 $ 98,574 March 14, 2022 276,190 1.050 290,000 March 17, 2022 278,810 1.076 300,000 March 21, 2022 474,068 1.0547 500,000 April 1, 2022 325,732 1.0745 350,313 Total 1,445,400 $ 1.065 $ 1,538,887 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 September 30, 2022, the Company had repurchased 268,070 shares of its common stock at a total cost of $278,277 at an average price of $1.038 per common share. The Company incurred fees of $8,266 associated with these transactions. All repurchased shares were retired in accordance with Maryland law. Purchase (Trade) Date Shares Purchased Price Per Share Total Cost (1) January 4, 2022 400 $ 1.060 $ 424 January 5, 2022 48,205 1.060 51,093 January 6, 2022 100,000 1.046 104,556 January 7, 2022 30,000 1.050 31,500 January 10, 2022 50,000 1.020 51,000 January 14, 2022 100 1.010 101 January 21, 2022 39,365 1.006 39,603 Total 268,070 $ 1.038 $ 278,277 (1) Total cost before transaction fees. Common shares and operating partnership units outstanding As of September 30, 2022 and December 31, 2021, respectively, there were 17,653,478 and 16,266,148 common units of the Operating Partnership outstanding with the REIT owning 17,439,947 and 16,052,617, respectively, of these common units. The remaining 213,531 common units are held by noncontrolling, limited partners. As of September 30, 2022 and December 31, 2021, respectively, there were 17,439,947 and 16,052,617 Common Shares of the REIT outstanding. As of September 30, 2022 and December 31, 2021, respectively, there were 213,531 and 213,531 common units of the Operating Partnership held by noncontrolling, limited partners 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 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 condensed 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 2, 2022, the Company’s Compensation Committee approved a grant of 60,000 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. The effective date of the grants was March 2, 2022. 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 $233,100, was recorded to share based compensation expense on the Company’s condensed 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 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 September 30, 2022 and 2021, respectively, 213,531 and 213,531 of the Operating Partnership’s 213,531 common units held by noncontrolling, limited partners 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: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Basic and diluted shares outstanding Weighted average Common Shares – basic 17,439,947 16,052,617 16,972,322 12,106,377 Effect of conversion of operating partnership units 213,531 213,531 213,531 213,531 Weighted average Common Shares – diluted 17,653,478 16,266,148 17,185,853 12,319,908 Calculation of earnings per share – basic and diluted Net loss attributable to common shareholders $ (1,754,458) $ (872,015) $ (3,758,629) $ (3,832,502) Weighted average Common Shares – basic and diluted 17,439,947 16,052,617 16,972,322 12,106,377 Loss per share – basic and diluted $ (0.10) $ (0.05) $ (0.22) $ (0.32) Dividends and Distributions During the three and nine months ended September 30, 2022, dividends in the amount of $0.02 and $0.06, respectively, per share were paid on January 20, 2022, to shareholders of record on January 13, 2022, on April 21, 2022 to shareholders of record on April 18, 2022 and on July 20, 2022 to shareholders of record on July 18, 2022. During the three and nine months ended September 30, 2021, dividends in the amount of $0.02 and $0.02 per share were paid on August 5, 2021 to shareholders of record on August 2, 2021. Total dividends and distributions to noncontrolling interests paid during the three and nine months ended September 30, 2022 and 2021, respectively, are as follows: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Common shareholders (dividends) $ 348,799 $ 321,052 $ 1,014,048 $ 321,052 Hampton Inn Property noncontrolling interest (distribution) — 358,576 — 358,576 Hanover Square Property noncontrolling interest (distributions) 24,800 16,000 41,200 28,000 Parkway Property noncontrolling interest (distributions) 9,000 — 48,600 — Operating Partnership unit holders (distributions) 4,271 4,271 12,812 4,271 Total dividends and distributions $ 386,870 $ 699,899 $ 1,116,660 $ 711,899 Nasdaq Compliance On July 11, 2022, the Company received a deficiency letter (the “Deficiency Letter”) from the Nasdaq Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, for the last thirty (30) consecutive business days, the closing bid price for the Company’s common stock has been below the minimum $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550 (a)(2) (the “Minimum Bid Price Requirement”). The Deficiency Letter has no immediate effect on the listing of the Company’s common stock, and its common stock will continue to trade on The Nasdaq Capital Market under the symbol “MDRR” at this time. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been given one hundred and eighty (180) calendar days, or until January 9, 2023, to regain compliance with the Minimum Bid Price Requirement. If at any time before January 9, 2023, the bid price of the Company’s common stock closes at $1.00 per share or more for a minimum of ten (10) consecutive business days, the Staff will provide written confirmation that the Company has achieved compliance. If the Company does not regain compliance with the Minimum Bid Price Requirement by January 9, 2023, the Company may be afforded a second one hundred and eighty (180) calendar day period to regain compliance. The Company intends to monitor the closing bid price of its common stock and may, if appropriate, consider available options to regain compliance with the Minimum Bid Price Requirement, including initiating a reverse stock split. However, there can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other Nasdaq Listing Rules. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022. 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 mutation of COVID-19 into new variants, and the possibility that changes in consumer behavior and business and leisure travel patterns will continue, the negative impact on consumer behavior, including demand for the goods and services of our retail tenants within our portfolio, and room demand for our hotel properties, could continue to be significant in future periods. Retail Center and Flex Center Properties As of the date of this Quarterly Report on Form 10-Q, 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. During the period following the onset of the COVID-19 pandemic, from March 2020 through December 2020, the Company granted lease concessions in the form of (i) rent deferrals or (ii) rent abatements. The deferral and abatement agreements have reduced the rent revenues the Company has recognized in all subsequent periods, including during the three and nine months ended September 30, 2022 and 2021, and will reduce the rent revenues the Company expects to receive in future periods. Under the rent deferral agreements, all of which were reached during the year ended December 31, 2020, the Company granted rent deferrals to various tenants in return for an agreement by the tenants to repay deferred and unpaid rent over a specified time period or before a certain date. Deferred rent is recognized as retail center property revenues or flex center property revenues on the Company’s condensed consolidated statement of operations and as rent and other receivables on the Company’s condensed consolidated balance sheets. As of September 30, 2022, all rent deferral periods have ended and, in all cases, tenants have commenced repayment of the deferred rent amounts. As of the date of this Quarterly Report on Form 10-Q, all tenants are current on their deferred rent repayment. Under the rent abatement agreements, all of which were reached during the year ended December 31, 2020, the Company agreed to permanently abate rent in exchange for lease extensions of between one and three years, depending on the amount of the abatement. In one case, the Company agreed to abate a portion of a tenant’s base rent in exchange for future rent payments based on the tenant’s monthly sales. Abated rent is excluded from future minimum rents in Note 6, above. 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 treatments, and potential mutations of COVID-19 and the response thereto. Revenues will continue to be impacted by the deferral and abatement agreements 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 The Company sold its Hampton Inn Property on August 31, 2021 and its Clemson Best Western Property on September 29, 2022 (see note 3, above). During the Company’s ownership of these properties, both were specifically subject to significant decreases in occupancy and revenues due to the impact of COVID-19 on business and leisure travel and generally subject to seasonal variations in occupancy and revenues. 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. Accordingly, should the Company make future investments in hotel properties, these investments could be subject to material impacts on occupancy and revenues from possible future outbreaks of COVID-19 and seasonality fluctuations in occupancy and revenues. 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. Litigation The Company is not currently involved in any litigation or legal proceedings. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions | |
Related Party Transactions | 9. Related Party Transactions Medalist Fund Manager, Inc. 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 condensed 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 three and nine months ended September 30, 2022, the Company incurred $221,265 and $653,668, in asset management fees, respectively. For the three and nine months ended September 30, 2021, the Company incurred $216,295 and $602,588, in asset management fees, respectively. 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 condensed 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 nine months ended September 30, 2022, the Company incurred $201,524 in acquisition fees associated with the Salisbury Marketplace Property acquisition, which were allocated and added to the fair value of the Salisbury Marketplace Property tangible assets. One half of the acquisition fee, or $100,762 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. No such acquisition fees were incurred or deferred during the three months ended September 30, 2022. For the three and nine months ended September 30, 2021, the Company incurred $145,758 in acquisition fees associated with the Greenbrier Business Center Property acquisition, which were allocated and added to the fair value of the tangible assets. One half of the acquisition fee, or $72,879 , 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. For the nine months ended September 30, 2021, the Company incurred $351,810 in acquisition fees, $206,052 associated with the Lancer Center Property acquisition, and $145,758 associated with the Greenbrier Business Center Property acquisition, which were allocated and added to the fair value of the tangible assets for each property. One half of the total acquisition fees, or $175,905 , 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. As of September 30, 2022 and December 31, 2021, the Company had accrued a total of $352,717 and $251,955, respectively, in acquisition fees resulting from the Company’s 2021 and 2022 acquisitions. These accrued acquisition fees are recorded under accounts payable and accrued liabilities on the Company’s condensed consolidated balance sheet as of September 30, 2022 and December 31, 2021. 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 three and nine months ended September 30, 2022 or 2021. 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 of up to three percent of the monthly gross revenues of the Franklin Square, Hanover Square, Ashley Plaza, Brookfield, Lancer Center, Greenbrier Business Center, Parkway and Salisbury properties. These fees are paid in arrears on a monthly basis. During the three and nine months ended September 30, 2022, the Company paid Shockoe Properties, LLC property management fees of $68,487 and $196,877, respectively. During the three and nine months ended September 30, 2021, the Company paid Shockoe Properties, LLC property management fees of $52,583 and $135,988 , respectively. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022, 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 three months ended September 30, Hotel properties Retail center properties Flex center property Total 2022 2021 2022 2021 2022 2021 2022 2021 Revenues $ 379,309 $ 1,280,338 $ 1,850,797 $ 1,494,219 $ 610,967 $ 263,586 $ 2,841,073 $ 3,038,143 Operating expenses 589,311 960,994 491,889 397,250 189,720 78,045 1,270,920 1,436,289 Bad debt expense — — — 22,140 — 678 — 22,818 Net operating (loss) income $ (210,002) $ 319,344 $ 1,358,908 $ 1,074,829 $ 421,247 $ 184,863 $ 1,570,153 $ 1,579,036 For the nine months ended September 30, Hotel properties Retail center properties Flex center property Total 2022 2021 2022 2021 2022 2021 2022 2021 Revenues $ 1,507,649 $ 4,009,041 $ 4,999,089 $ 4,049,209 $ 1,834,200 $ 630,007 $ 8,340,938 $ 8,688,257 Operating expenses 1,302,114 2,733,578 1,384,061 1,079,014 511,771 196,849 3,197,946 4,009,441 Bad debt expense — — 7,954 25,336 4,992 678 12,946 26,014 Net operating income $ 205,535 $ 1,275,463 $ 3,607,074 $ 2,944,859 $ 1,317,437 $ 432,480 $ 5,130,046 $ 4,652,802 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events | |
Subsequent Events | 11. Subsequent Events As of November 9, 2022, the following events have occurred subsequent to the September 30, 2022 effective date of the condensed consolidated financial statements: Common Stock Dividend On October 20, 2022, a dividend in the amount of $0.01 per share was paid to common stock shareholders and operating partnership unit holders of record on October 17, 2022. Mandatorily Redeemable Preferred Stock Dividend On October 20, 2022, a dividend in the amount of $0.50 per share was paid to mandatorily redeemable preferred stock shareholders of record on October 17, 2022 for the period from July 21, 2022 through October 19, 2022. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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. Capitalized leasing commissions and tenant improvements incurred and paid by the Company subsequent to the acquisition of the investment property 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. Other than the tenant-specific losses 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 three and nine months ended September 30, 2022 and 2021, that would result in the projected value being below the carrying value of the Company’s properties. During the nine months ended September 30, 2022, two tenants defaulted on their leases and abandoned their premises. The Company determined that the carrying value of certain intangible assets and liabilities associated with these leases that were recorded as part of the purchase of the these properties should be written off. As a result, the Company recorded a loss on impairment of $36,670 for the nine months ended September 30, 2022. No such tenant-related loss on impairment was recorded during the three months ended September 30, 2022, or during the three and nine months ended September 30, 2021. |
Assets Held for Sale | Assets Held for Sale The Company may decide to sell properties that are held as investment properties. The accounting treatment for the disposal of long-lived assets is covered by ASC 360. Under this guidance, the Company records the assets associated with 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. Delays in the time required to complete a sale do not preclude a long-lived asset from continuing to be classified as held for sale beyond the initial one year period if the delay is caused by events or circumstances beyond an entity’s control and there is sufficient evidence that the entity remains committed to a qualifying plan to sell the long-lived asset. 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. During February 2021, the Company committed to a plan for the sale of an asset group associated with the Clemson Best Western Hotel Property that included the land, site improvements, building, building improvements and furniture, fixtures and equipment. As of March 31, 2021, the Company recorded this asset group, and the associated mortgage payable, as held for sale. As of March 31, 2021, the date the Company originally recorded this asset group as held for sale, the Company determined that the fair value of the Clemson Best Western Property exceeded the carrying value of its asset group, and the Company did not record impairment of assets held for sale associated with this asset group. During subsequent periods since the asset group associated with the Clemson Best Western Property were initially classified as held for sale, the Company has continued to follow its disposal plan. Under ASC 360, during subsequent reporting periods after the asset group is classified as held for sale, it is necessary to evaluate the amounts previously used for the estimated fair value of the asset group. Up to and including the reporting periods ending December 31, 2021, the Company reviewed and reassessed the estimated fair value of the asset group and believed that the fair value, less estimated costs to sell, exceeds the Company’s carrying cost in the property. Accordingly, the Company did not record impairment of assets held for sale related to the Clemson Best Western Property for the year ended December 31, 2021. As of March 31, 2022, the Company determined that the carrying value of the asset group associated with the Clemson Best Western Hotel Property exceeded its fair value, less estimated costs to sell, and recorded impairment of assets held for sale of $175,671 on its condensed consolidated statement of operations for the nine months ended September 30, 2022. No such impairment of assets held for sale was recorded during the three and nine months ended September 30, 2021. On September 29, 2022, the Company closed on the sale of the Clemson Best Western Hotel Property to an unaffiliated purchaser. See Note 3 for additional details. |
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. During the nine months ended September 30, 2022, two tenants defaulted on their leases and abandoned their premises. The Company determined that the book value of the intangible assets and liabilities, net, associated with these leases of $36,670 that were recorded as part of the purchase of these properties should be written off. This amount is included in the loss on impairment reported on the Company’s condensed consolidated statement of operations for the nine months ended September 30, 2022. No such loss on impairment was recorded for the three months ended September 30, 2022 or for the three and nine months ended September 30, 2021. 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: September 30, 2022 (unaudited) December 31, 2021 Intangible Assets Leasing commissions $ 1,196,385 $ 1,153,736 Legal and marketing costs 187,197 163,019 Above market leases 239,375 360,509 Net leasehold asset 2,443,038 2,523,128 $ 4,065,995 $ 4,200,392 Intangible Liabilities Below market leases $ (2,344,281) $ (1,880,612) 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 nine months ended September 30, 2022 and 2021, respectively, were as follows: For the three months ended For the nine months ended September 30, September 30, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (unaudited) Amortization of above market leases $ (33,862) $ (67,206) $ (159,388) $ (180,803) Amortization of below market leases 115,679 73,174 305,456 183,153 $ 81,817 $ 5,968 $ 146,068 $ 2,350 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 three and nine months ended September 30, 2022 and 2021, respectively, were as follows: For the three months ended For the nine months ended September 30, September 30, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (unaudited) Leasing commissions $ (62,882) $ (54,798) $ (185,331) $ (146,473) Legal and marketing costs (18,533) (9,738) (48,000) (23,620) Net leasehold asset (242,877) (211,399) (804,469) (525,918) $ (324,292) $ (275,935) $ (1,037,800) $ (696,011) As of September 30, 2022 and December 31, 2021, the Company’s accumulated amortization of lease origination costs, leases in place and legal and marketing costs totaled $2,148,833 and $2,779,370, respectively. During the three and nine months ended September 30, 2022, the Company wrote off $166,029 and $1,663,228, respectively, in accumulated amortization related to fully amortized intangible assets and $0 and $5,108, respectively, in accumulated amortization related to the write off of assets related to the tenant defaults, discussed above. Future amortization of above and below market leases, lease origination costs, leases in place, legal and marketing costs and tenant relationships is as follows: For the remaining three months ending December 31, 2022 2023 2024 2025 2026 2027-2041 Total Intangible Assets Leasing commissions $ 60,963 $ 219,221 $ 173,352 $ 145,550 $ 107,312 $ 489,987 $ 1,196,385 Legal and marketing costs 17,759 61,506 39,837 24,004 13,160 30,931 187,197 Above market leases 29,515 97,960 45,608 21,526 15,629 29,137 239,375 Net leasehold asset 209,049 623,930 400,511 295,851 199,466 714,231 2,443,038 $ 317,286 $ 1,002,617 $ 659,308 $ 486,931 $ 335,567 $ 1,264,286 $ 4,065,995 Intangible Liabilities Below market leases, net $ (110,169) $ (368,802) $ (285,892) $ (213,348) $ (178,776) $ (1,187,294) $ (2,344,281) |
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 three and nine months ended September 30, 2022 and 2021, 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 September 30, 2022, the Company held three cash accounts with an aggregate balance that exceeded the FDIC limit by $3,306,551. As of December 31, 2021, the Company held five cash accounts with an aggregate balance that exceeded the FDIC limit by $2,377,633. 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 September 30, 2022 and December 31, 2021, the Company reported $266,837 and $222,265, 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 September 30, 2022 and December 31, 2021, the Company reported $897,434 and $1,523,837, respectively, in escrow deposits. Capital reserves are restricted cash balances held by lenders for capital improvements, leasing commissions furniture, fixtures and equipment, and tenant improvements. As of September 30, 2022 and December 31, 2021, the Company reported $944,850 and $1,267,470, respectively, in capital property reserves. September 30, 2022 December 31, (unaudited) 2021 Property and Purpose of Reserve Clemson Best Western Property - improvements $ — $ 50,012 Clemson Best Western Property - furniture, fixtures and equipment — 275,109 Franklin Square Property - leasing costs 815,561 700,000 Brookfield Center Property - maintenance reserve 129,289 92,349 Greenbrier Business Center - capital reserve — 150,000 Total $ 944,850 $ 1,267,470 |
Share Retirement | Share Retirement ASC 505-30-30-8 provides guidance on accounting for share retirement and establishes two alternative methods for accounting for the repurchase price paid in excess of par value. The Company has elected the method by which the excess between par value and the repurchase price, including costs and fees, is recorded to additional paid in capital on the Company’s condensed consolidated balance sheets. During the nine months ended September 30, 2022, the Company repurchased 268,070 shares of its common stock at a total cost of $278,277 at an average price of $1.038 per common share. The Company incurred fees of $8,266 associated with these transactions. Of the total repurchase price, $2,681 was recorded to common stock and the difference, $283,862, was recorded to additional paid in capital on the Company’s condensed consolidated balance sheet. No such amounts were recorded during the three months ended September 30, 2022 or during the three and nine months ended September 30, 2021. |
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 condensed consolidated balance sheets. As of September 30, 2022 and December 31, 2021, the Company reported $985,089 and $872,322, 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 condensed consolidated statements of operations under the captions "Retail center property revenues” and “Flex center property tenant revenues.” (See Recent Accounting Pronouncements, below.) 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. Since these differences are determined annually under the leases and accrued as of December 31 in the year earned, no such revenues were recognized during the three and nine months ended September 30, 2022 and 2021. The Company recognizes lease termination fees in the period that the lease is terminated and collection of the fees is reasonably assured. Upon early lease termination, the Company provides for losses related to unrecovered intangibles and other assets. During the three and nine months ended September 30, 2022 and 2021, respectively, no such termination fees were recognized. Hotel Property Revenues Hotel revenues from the Clemson Best Western Property (and for prior year periods, the Hampton Inn 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 Clemson University occupancy agreement ended on May 15, 2022. The Clemson Best Western Property (and for prior year periods, the Hampton Inn Property) is 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 Clemson Best Western Property has a legal obligation to act as a collection agent. The Clemson Best Western Property does not retain these taxes and fees; therefore, they are not included in revenues. The Clemson Best Western Property records 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 | Hotel Property Operating Expenses All personnel of the Clemson Best Western Property (and in prior year periods, the Hampton Inn 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 Clemson Best Western Property, total amounts incurred for payroll salaries and wages, payroll taxes and other employee benefits for the three and nine months ended September 30, 2022 were $198,024 and $469,839, respectively, and for the three and nine months ended September 30, 2021 were $119,345 and $339,863 , respectively and for the three and nine months ended September 30, 2021 were $250,724 and $622,844 , respectively |
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 September 30, 2022 and December 31, 2021, the Company’s allowance for uncollectible rent totaled $18,219 and $13,010, 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 September 30, 2022 and December 31, 2021, 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 three and nine months ended September 30, 2022 , , 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 condensed 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 The ownership interests not held by the REIT are considered noncontrolling interests. There are four elements of noncontrolling interests in the capital structure of the Company. These noncontrolling interests have been reported in equity on the condensed consolidated balance sheets but separate from the Company’s equity. On the condensed consolidated statements of operations, the subsidiaries are reported at the condensed consolidated amount, including both the amount attributable to the Company and noncontrolling interests. The Company’s condensed 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, which the Company and the noncontrolling owner sold on August 31, 2021. Prior to its sale, the Hampton Inn Property’s net income (loss) was allocated to the noncontrolling ownership interest based on its percent ownership. During the three and nine months ended September 30, 2021, 22 percent of the Hampton Inn’s net income of $7,224 and $90,202 , respectively, or respectively No such allocation was necessary during the three and nine months ended September 30, 2022 due to the sale of the property on August 31, 2021. 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 income (loss) is allocated to the noncontrolling ownership interest based on its 16 percent ownership. During the three and nine months ended September 30, 2022, 16 percent of the Hanover Square Property’s net income of $52,923 and $96,382 , respectively, or and $15,421 , respectively $89,996 , respectively, and $14,398 , respectively, 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 income is allocated to the noncontrolling ownership interest based on its 18 percent ownership. During the three and nine months ended September 30, 2022, 18 percent of the Parkway Property's net income of $93,231 and $172,368 , respectively, and $31,027 , respectively 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 September 30, 2022, there were 213,531 Operating Partnership units outstanding. The Operating Partnership units not held by the REIT represent 1.21 percent and 1.31 percent of the outstanding Operating Partnership units as of September 30, 2022 and December 31, 2021, 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 three and nine months ended September 30, 2022, a weighted average of 1.21 and 1.21 percent of the Operating Partnership’s net loss of $1,233,543 and $1,671,091 , respectively, or $14,926 and $20,275 , respectively was allocated to the noncontrolling unit holders. During the three and nine months ended September 30, 2021, a weighted average of 1.31 and 2.05 percent, respectively, of the Operating Partnership’s net (loss) income of ( $34,331 ) and $147,189 , respectively, or ( $450 ) and $3,023 , respectively, 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 2016-02, Leases (Topic 842) Leases significant provisions of this standard include (i) defining the “lease term” to include the non-cancelable period together with periods for which there is a significant economic incentive for the lessee to extend or not terminate the lease; (ii) defining the initial lease liability 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. Following those deferrals, 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 adopted the standard effective on January 1, 2022 using the modified retrospective approach within ASU 2018-11, which allows for the application date to be the beginning of the reporting period in which the entity first applies the new standard. The Company historically has not been and is not currently a “lessee” under any lease agreements, and thus did not have any arrangements requiring the recognition of lease assets or liabilities on its balance sheet. As a “lessor”, the Company has active lease agreements with over 100 tenants across its portfolio of investment properties. On a prospective and retrospective basis, the accounting for those leases under ASU 2016-02 (ASC No. 842) is substantially unchanged from the previous guidance in ASC No. 840. However, upon the adoption of ASC No. 842, the Company has elected the practical expedient permitting lessors to elect by class of underlying asset to not separate non-lease components (for example, maintenance services, including common area maintenance) from associated lease components (the “non-separation practical expedient”) if both of the following criteria are met: (1) the timing and pattern of transfer of the lease and non-lease component(s) are the same and (2) the lease component would be classified as an operating lease if it were accounted for separately. If both criteria are met, the combined component is accounted for in accordance with ASC No. 842 if the lease component is the predominant component of the combined component; otherwise, the combined component is accounted for in accordance with the revenue recognition standard. The Company assessed the criteria above with respect to our operating leases and determined that they qualify for the non-separation practical expedient. As a result, the Company has accounted for and presented the revenues from these leases, including tenant reimbursements, as a single line item on its condensed consolidated statements of operations for the three and nine months ended September 30, 2022. Prior to the adoption of ASC No. 842, the Company separated lease related revenue from its retail center and flex center properties into two components. Fixed rental payments under its leases (recognized on a straight-line basis over the term of the underlying lease) were recorded as retail center property revenues and flex center property revenues. Variable payments made under the leases made by tenants for real estate taxes, insurance and common area maintenance (“CAM”) expenses were recorded as retail center and flex center tenant reimbursements. For comparability, the Company has adjusted its comparative condensed consolidated statement of operations for the three and nine months ended September 30, 2021, to conform to the 2022 financial statement presentation. The prior period operating lease income presented in retail center property revenues include $217,828 and $607,646 previously classified as retail center property tenant reimbursements for the three and nine months ended September 30, 2021, respectively, and $56,310 and $143,320 previously classified as flex center property tenant reimbursements for the three and nine months ended September 30, 2021, respectively. These reclassifications had no effect on total revenues, net income, total assets, total liabilities or equity. 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 Effects of Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, . The London Interbank Offered Rate (LIBOR), which is widely used as a reference interest rate in debt agreements and other contracts, was effectively discontinued for new contracts as of December 31, 2021, and its publication for existing contracts is scheduled to be discontinued by June 30, 2023. Financial market regulators in certain jurisdictions throughout the world undertook reference rate reform initiatives to guide the transition and modification of debt agreements and other contracts that are based on LIBOR to the successor reference rate that will replace it. ASU 2020-04 was issued to provide companies that are impacted by these changes with the opportunity to elect certain expedients and exceptions that are intended to ease the potential burden of accounting for or recognizing the effects of reference rate reform on financial reporting. Companies may generally elect to make use of the expedients and exceptions provided by ASU 2020-04 for any reference rate contract modifications that occur in reporting periods that encompass the timeline from March 12, 2020 to December 31, 2022. The Company’s Parkway Property is financed by a mortgage loan with a corresponding interest rate protection agreement which both use USD LIBOR as the reference interest rate (see Note 5, below). The mortgage loan matures on November 1, 2031, and the interest rate protection agreement expires on December 1, 2026. The Company is continuing to review the guidance in ASU 2020-04 and anticipates that it will use the expedients and exceptions provided therein with respect to the replacement of USD LIBOR as the reference rate in the Parkway Property mortgage loan and corresponding interest rate protection agreement. However, the Company does not expect that any changes under ASU 2020-04 will have a material impact on its condensed consolidated financial statements. 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 condensed 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 condensed 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 condensed 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 condensed consolidated financial statements within the parameters set forth in the accounting guidance. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of net intangible assets and liabilities | September 30, 2022 (unaudited) December 31, 2021 Intangible Assets Leasing commissions $ 1,196,385 $ 1,153,736 Legal and marketing costs 187,197 163,019 Above market leases 239,375 360,509 Net leasehold asset 2,443,038 2,523,128 $ 4,065,995 $ 4,200,392 Intangible Liabilities Below market leases $ (2,344,281) $ (1,880,612) |
Schedule of adjustments to rental revenue related to the above and below market leases | For the three months ended For the nine months ended September 30, September 30, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (unaudited) Amortization of above market leases $ (33,862) $ (67,206) $ (159,388) $ (180,803) Amortization of below market leases 115,679 73,174 305,456 183,153 $ 81,817 $ 5,968 $ 146,068 $ 2,350 |
Schedule of amortization related to intangible assets | For the three months ended For the nine months ended September 30, September 30, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (unaudited) Leasing commissions $ (62,882) $ (54,798) $ (185,331) $ (146,473) Legal and marketing costs (18,533) (9,738) (48,000) (23,620) Net leasehold asset (242,877) (211,399) (804,469) (525,918) $ (324,292) $ (275,935) $ (1,037,800) $ (696,011) |
Schedule of future amortization of above and below market leases | For the remaining three months ending December 31, 2022 2023 2024 2025 2026 2027-2041 Total Intangible Assets Leasing commissions $ 60,963 $ 219,221 $ 173,352 $ 145,550 $ 107,312 $ 489,987 $ 1,196,385 Legal and marketing costs 17,759 61,506 39,837 24,004 13,160 30,931 187,197 Above market leases 29,515 97,960 45,608 21,526 15,629 29,137 239,375 Net leasehold asset 209,049 623,930 400,511 295,851 199,466 714,231 2,443,038 $ 317,286 $ 1,002,617 $ 659,308 $ 486,931 $ 335,567 $ 1,264,286 $ 4,065,995 Intangible Liabilities Below market leases, net $ (110,169) $ (368,802) $ (285,892) $ (213,348) $ (178,776) $ (1,187,294) $ (2,344,281) |
Schedule of property and purpose of reserve | September 30, 2022 December 31, (unaudited) 2021 Property and Purpose of Reserve Clemson Best Western Property - improvements $ — $ 50,012 Clemson Best Western Property - furniture, fixtures and equipment — 275,109 Franklin Square Property - leasing costs 815,561 700,000 Brookfield Center Property - maintenance reserve 129,289 92,349 Greenbrier Business Center - capital reserve — 150,000 Total $ 944,850 $ 1,267,470 |
Investment Properties (Tables)
Investment Properties (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Schedule of investment properties | September 30, 2022 December 31, (unaudited) 2021 Land $ 16,526,436 $ 14,142,555 Site improvements 4,719,926 4,431,338 Buildings and improvements (1) 64,609,952 57,322,242 Investment properties at cost (2) 85,856,314 75,896,135 Less accumulated depreciation 8,529,883 6,488,220 Investment properties, net $ 77,326,431 $ 69,407,915 (1) Includes tenant improvements (both those acquired at the acquisition and those constructed after the acquisition), capitalized leasing commissions and other capital costs incurred post-acquisition. (2) 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 | September 30, 2022 December 31, (unaudited) 2021 Capitalized tenant improvements – acquisition cost allocation, net $ 3,359,767 $ 1,840,612 Capitalized tenant improvements incurred subsequent to acquisition, net 349,317 257,340 September 30, 2022 December 31, (unaudited) 2021 Capitalized leasing commissions, net $ 508,906 $ 356,327 |
Schedule of assets held for sale and liabilities associated with assets held for sale | September 30, 2022 December 31, (unaudited) 2021 Investment properties, net $ — $ 9,846,208 Total assets held for sale $ — $ 9,846,208 September 30, 2022 December 31, (unaudited) 2021 Mortgages payable, net $ — $ 7,615,368 Total liabilities associated with assets held for sale $ — $ 7,615,368 |
Schedule of operating results of hotel properties included in continuing operations | Operating results of the Clemson Best Western Hotel Property and the Hampton Inn Property, which are included in continuing operations, are as follows: For the three months ended For the nine months ended September 30, September 30, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (unaudited) Hotel property room revenues $ 376,560 $ 1,262,406 $ 1,494,836 $ 3,970,548 Hotel property other revenues 2,749 17,932 12,813 38,493 Total Revenue 379,309 1,280,338 1,507,649 4,009,041 Hotel property operating expenses 589,311 960,994 1,302,114 2,733,578 Depreciation and amortization — — — — Total Operating Expenses 589,311 960,994 1,302,114 2,733,578 (Loss) gain on disposal of investment properties (389,471) 124,641 (389,471) 124,641 Operating (Loss) Income (599,473) 443,985 (183,936) 1,400,104 Interest expense 147,589 260,043 426,757 924,339 Net (Loss) Income from Operations (747,062) 183,942 (610,693) 475,765 Other expense (172) (201) (48) (190) Net (Loss) Income (747,234) 183,741 (610,741) 475,575 Net income attributable to Hampton Inn Property noncontrolling interests — 1,590 — 19,845 Net (loss) income attributable to Operating Partnership noncontrolling interests (11,697) 2,387 (12,040) 12,329 Net Loss (Income) Attributable to Medalist Common Shareholders $ (735,537) $ 179,764 $ (598,701) $ 443,401 |
Schedule of fair values of assets acquired and liabilities assumed | Lancer Greenbrier Center Business Center Property Property Total Fair value of assets acquired: Investment property (a) $ 9,902,876 $ 6,896,803 $ 16,799,679 Lease intangibles and other assets (b) 1,023,753 583,940 1,607,693 Restricted cash acquired (c) — 150,000 150,000 Above market leases (b) 157,438 48,186 205,624 Below market leases (b) (878,682) (100,167) (978,849) Fair value of net assets acquired (d) $ 10,205,385 $ 7,578,762 $ 17,784,147 Purchase consideration: Consideration paid with cash (e) $ 3,783,515 $ 3,097,162 $ 6,880,677 Consideration paid with new mortgage debt, net (f) 6,421,870 — 6,421,870 Consideration paid with assumed mortgage debt, net (g) — 4,481,600 4,481,600 Total consideration (h) $ 10,205,385 $ 7,578,762 $ 17,784,147 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. Issuance of new mortgage debt to fund the purchase of the Lancer Center Property, net of capitalized loan issuance costs. See Note 5, below. g. Assumption of mortgage debt related to the purchase of the Greenbrier Business Center Property. See Note 5, below. h. Represents the consideration paid for the fair value of the assets and liabilities acquired. |
Salisbury Marketplace Property | |
Schedule of fair values of assets acquired and liabilities assumed | Salisbury Marketplace Property Fair value of assets acquired: Investment property (a) $ 9,963,258 Lease intangibles and other assets (b) 1,045,189 Above market leases (b) 40,392 Below market leases (b) (769,125) Fair value of net assets acquired (c) $ 10,279,714 Purchase consideration: Consideration paid with cash (d) $ 3,746,561 Consideration paid with new mortgage debt, net (e) 6,533,153 Total consideration (f) $ 10,279,714 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 the total fair value of assets and liabilities acquired at closing. d. 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. e. Represents allocation of the Wells Fargo Mortgage Facility proceeds used to fund the purchase of the Salisbury Marketplace Property, net of $18,847 in capitalized loan issuance costs. See Note 5, below. f. Represents the consideration paid for the fair value of the assets and liabilities acquired. |
Mandatorily Redeemable Prefer_2
Mandatorily Redeemable Preferred Stock (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 April 21, 2022 April 18, 2022 0.50 January 20, 2022 - April 20, 2022 July 21, 2022 July 18, 2022 0.50 April 21, 2022 - July 20, 2022 October 20, 2022 October 17, 2022 0.50 July 21, 2022 - October 19, 2022 |
Loans Payable (Tables)
Loans Payable (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Loans Payable | |
Schedule of mortgages payables, net | The Company’s mortgages payables, net consists of the following: September 30, Monthly Interest 2022 December 31, Property Payment Rate Maturity (unaudited) 2021 Franklin Square (a) Interest only 3.808 % December 2031 $ 13,250,000 $ 13,250,000 Hanover Square (b) $ 56,882 4.25 % December 2027 9,943,087 10,134,667 Ashley Plaza (c) $ 52,795 3.75 % September 2029 10,966,333 11,127,111 Brookfield Center (d) $ 22,876 3.90 % November 2029 4,685,210 4,758,344 Parkway Center (e) $ 19,720 Variable October 2026 5,010,286 5,090,210 Wells Fargo Facility (f) $ 103,438 4.50 % June 2027 18,450,515 — Lancer Center (g) — 6,488,034 Greenbrier Business Center (h) — 4,495,000 Unamortized issuance costs, net (752,580) (825,544) Total mortgages payable, net $ 61,552,851 $ 54,517,822 (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 under 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 September 30, 2022 and December 31, 2021, the Company believes that it is compliant with these covenants. (b) The mortgage loan for the Hanover Square Property bears interest at 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 of $56,882 which includes interest at the fixed rate, and principal, based on a 25 year amortization schedule. 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 September 30, 2022 and December 31, 2021, 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 30 year amortization schedule. (d) 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 30 year amortization schedule. (e) 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 September 30, 2022 and December 31, 2021, the rate in effect for the Parkway Property mortgage was 4.814 percent and 2.3493 percent, respectively. 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. (f) On June 13, 2022, the Company entered into a mortgage loan facility with Wells Fargo Bank (the “Wells Fargo Mortgage Facility”) in the principal amount of $18,609,500 . The proceeds of this mortgage were used to finance the acquisition of the Salisbury Marketplace Property and to refinance the mortgages payable on the Lancer Center Property and the Greenbrier Business Center Property (see notes (g) and (h), below). The Wells Fargo Mortgage Facility bears interest at a fixed rate of 4.50 percent for a five year term. The monthly payment, which includes interest at the fixed rate, and principal, based on a 25 year amortization schedule, is $103,438 . The Company has provided an unconditional guaranty of the payment of and performance under the terms of the Wells Fargo Mortgage Facility. The Wells Fargo Mortgage Facility credit agreement includes covenants to maintain a debt service coverage ratio of not less than 1.50 to 1.00 on an annual basis, a minimum debt yield of 9.5 percent on the Salisbury Marketplace, Lancer Center and Greenbrier Business Center properties, and the maintenance of liquid assets of not less than $1,500,000 . As of September 30, 2022, the Company believes that it is compliant with these covenants. (g) On June 13, 2022, the Company refinanced the mortgage loan for the Lancer Center Property, using proceeds from the Wells Fargo Facility discussed above. The Company accounted for this refinancing transaction under debt extinguishment accounting in accordance with ASC 470, and for the three and nine months ended September 30, 2022, recorded a loss on extinguishment of debt of $0 and $113,282 , respectively. The original mortgage loan for the Lancer Center Property bore interest at a fixed rate of 4.00 percent. The monthly payment was $34,667 which included interest at the fixed rate and principal, based on a twenty-five year amortization schedule. (h) On June 13, 2022, the Company refinanced the mortgage loan for the Greenbrier Business Center Property, using proceeds from the Wells Fargo Facility discussed above. The Company accounted for this refinancing transaction under debt extinguishment accounting in accordance with ASC 470, and for the three and nine months ended September 30, 2022, recorded a loss on extinguishment of debt of $0 and $56,393 , respectively. The Company assumed the original mortgage loan for the Greenbrier Business Center Property from the seller. The original mortgage loan bore interest at a fixed rate of 4.00 percent and would have been interest only until August 1, 2022, at which time the monthly payment would have become $23,873 , which would have included interest at the fixed rate, and principal, based on a twenty-five year amortization schedule. Interest rate protection transaction On October 28, 2021, the Company entered into an Interest Rate Protection Transaction to limit the Company’s exposure to increases in interest rates on the variable rate mortgage loan on the Parkway Property. Under this agreement, the Company’s interest rate exposure is capped at 5.25 percent if USD 1-Month ICE LIBOR exceeds 3 percent. USD 1-Month ICE LIBOR was 3.143 percent and 0.102 percent as of September 30, 2022 and December 31, 2021, respectively. In accordance with the guidance on derivatives and hedging, the Company records all derivatives on the balance sheet at fair value under other assets. 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 September 30, 2022 and December 31, 2021, respectively, the fair value of the interest Rate Protection Transaction, based on level 1 inputs, was $283,461 and $37,350. The Company reports changes in the fair value of the derivative as a decrease (increase) in fair value-interest rate cap on its consolidated statements of operations. 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: Balance September 30, Monthly Interest 2022 December 31, Property Payment Rate Maturity (unaudited) 2021 Clemson Best Western (a) Interest only Variable October 2022 — 7,750,000 Unamortized issuance costs, net — (134,632) Total mortgages payable, net, associated with assets held for sale $ — $ 7,615,368 (a.) 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 bore interest at a variable rate based on LIBOR with a minimum rate of 7.15 percent . The interest rate payable was the USD LIBOR one-month rate plus 4.9 percent. As of September 30, 2022 and December 31, 2021, respectively, the rate in effect for the Clemson Best Western Property mortgage was 7.15 percent. On September 29, 2022, the Company sold the Clemson Best Western Property and repaid the Clemson Best Western Property mortgage payable. The Company accounted for the repayment of the mortgage payable under debt extinguishment accounting in accordance with ASC 470. During the three months ended September 30, 2022, the Company recorded a loss on extinguishment of debt of $219,532 , consisting of $84,900 in fees paid to the lender and a write off of $134,632 of unamortized loan issuance costs. |
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 |
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 | For the three months ended September 30, 2022 (unaudited) Amortization Mortgage of discounts and Other Interest capitalized interest Expense issuance costs expense Total Franklin Square mortgage $ 128,943 $ 7,093 $ — $ 136,036 Hanover Square mortgage 108,222 3,223 — 111,445 Hampton Inn mortgage — — — — Ashley Plaza mortgage 105,438 4,357 — 109,795 Clemson Best Western mortgage 146,507 — 1,082 147,589 Brookfield Center mortgage 46,844 2,838 — 49,682 Parkway Center mortgage 56,023 2,757 — 58,780 Wells Fargo Mortgage Facility 212,895 6,722 — 219,617 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 56,311 100,000 156,311 Total interest expense $ 804,872 $ 83,301 $ 101,082 $ 989,255 For the three months ended September 30, 2021 (unaudited) Amortization Mortgage of discounts and Other Interest capitalized interest Expense issuance costs expense Total Franklin Square mortgage $ 171,458 $ 2,317 $ — $ 173,775 Hanover Square mortgage 108,571 3,223 — 111,794 Hampton Inn mortgage 116,422 — 1,655 118,077 Ashley Plaza mortgage 107,459 4,358 — 111,817 Clemson Best Western mortgage 141,609 — 357 141,966 Brookfield Center mortgage 47,708 2,838 — 50,546 Lancer Center mortgage 65,959 7,156 — 73,115 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 51,637 100,000 151,637 Other interest — — 332 332 Total interest expense $ 776,666 $ 71,760 $ 102,344 $ 950,770 For the nine months ended September 30, 2022 (unaudited) Amortization Mortgage of discounts and Other Interest capitalized interest Expense issuance costs expense Total Franklin Square mortgage $ 382,625 $ 21,279 $ — $ 403,904 Hanover Square mortgage 319,640 9,668 — 329,308 Hampton Inn mortgage — — — — Ashley Plaza mortgage 314,378 13,072 — 327,450 Clemson Best Western mortgage 425,109 — 1,648 426,757 Brookfield Center mortgage 139,646 8,513 — 148,159 Lancer Center mortgage 115,179 11,928 — 127,107 Greenbrier Business Center mortgage 81,409 1,155 — 82,564 Parkway Center mortgage 124,490 8,270 — 132,760 Wells Fargo Mortgage Facility 254,766 6,722 — 261,488 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 165,338 300,000 465,338 Total interest expense $ 2,157,242 $ 245,945 $ 301,648 $ 2,704,835 For the nine months ended September 30, 2021 (unaudited) Amortization Mortgage of discounts and Other Interest capitalized interest Expense issuance costs expense Total Franklin Square mortgage $ 508,783 $ 6,961 $ — $ 515,744 Hanover Square mortgage 328,636 9,680 — 338,316 Hampton Inn mortgage 456,300 9,000 10,544 475,844 Ashley Plaza mortgage 320,316 13,074 — 333,390 Clemson Best Western mortgage 420,211 22,437 5,847 448,495 Brookfield Center mortgage 142,188 8,514 — 150,702 Lancer Center mortgage 100,493 10,814 — 111,307 Greenbrier Business Center mortgage 17,480 231 — 17,711 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 151,616 300,000 451,616 Amortization and interest on convertible debentures — 1,718,487 42,486 1,760,973 Other interest — — 5,100 5,100 Total interest expense $ 2,294,407 $ 1,950,814 $ 363,977 $ 4,609,198 |
Schedule of interest accrued and accumulated amortization of capitalized issuance costs | As of September 30, 2022 (unaudited) As of December 31, 2021 Accumulated Accumulated amortization of amortization capitalized Accrued of capitalized Accrued interest issuance costs interest issuance costs Franklin Square mortgage $ 42,046 $ 23,643 $ — $ 2,364 Hanover Square mortgage 37,562 56,658 38,287 46,990 Ashley Plaza mortgage — 53,752 — 40,679 Clemson Best Western mortgage — — 47,716 134,622 Brookfield Center mortgage — 34,055 15,979 25,542 Lancer Center mortgage — — 22,042 17,971 Greenbrier Business Center mortgage — — 15,482 924 Parkway Center mortgage 20,100 10,108 9,966 1,838 Wells Fargo Mortgage Facility — 6,722 — — Amortization and accrued preferred stock dividends (1) on mandatorily redeemable preferred stock 70,004 532,096 70,004 366,758 Total $ 169,712 $ 717,034 $ 219,476 $ 637,688 (1) Recorded as accrued interest under accounts payable and accrued liabilities on the Company’s condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021, respectively. |
Schedule of principal repayments on indebtedness | For the remaining three months ending December 31, 2022 $ 269,798 2023 1,101,643 2024 1,142,095 2025 1,429,359 2026 1,488,466 Thereafter 56,874,070 Total principal payments and debt maturities 62,305,431 Less unamortized issuance costs (752,580) Net principal payments and debt maturities $ 61,552,851 |
Rentals under Operating Leases
Rentals under Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Rentals under Operating Leases | |
Schedule of future minimum rentals to be received under noncancelable tenant operating leases | For the remaining three months ending December 31, 2022 $ 1,968,016 2023 7,533,437 2024 6,181,843 2025 5,295,766 2026 3,795,021 Thereafter 10,193,285 Total minimum rents $ 34,967,368 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity | |
Schedule of Stock Issuances under Standby Equity Purchase Agreement | Issuance Date Shares Issued Price Per Share Total Proceeds March 3, 2022 90,600 $ 1.088 $ 98,574 March 14, 2022 276,190 1.050 290,000 March 17, 2022 278,810 1.076 300,000 March 21, 2022 474,068 1.0547 500,000 April 1, 2022 325,732 1.0745 350,313 Total 1,445,400 $ 1.065 $ 1,538,887 |
Schedule of common stock purchases under Common Stock Repurchase Plan | Purchase (Trade) Date Shares Purchased Price Per Share Total Cost (1) January 4, 2022 400 $ 1.060 $ 424 January 5, 2022 48,205 1.060 51,093 January 6, 2022 100,000 1.046 104,556 January 7, 2022 30,000 1.050 31,500 January 10, 2022 50,000 1.020 51,000 January 14, 2022 100 1.010 101 January 21, 2022 39,365 1.006 39,603 Total 268,070 $ 1.038 $ 278,277 (1) Total cost before transaction fees. |
Schedule of earnings per common share | Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Basic and diluted shares outstanding Weighted average Common Shares – basic 17,439,947 16,052,617 16,972,322 12,106,377 Effect of conversion of operating partnership units 213,531 213,531 213,531 213,531 Weighted average Common Shares – diluted 17,653,478 16,266,148 17,185,853 12,319,908 Calculation of earnings per share – basic and diluted Net loss attributable to common shareholders $ (1,754,458) $ (872,015) $ (3,758,629) $ (3,832,502) Weighted average Common Shares – basic and diluted 17,439,947 16,052,617 16,972,322 12,106,377 Loss per share – basic and diluted $ (0.10) $ (0.05) $ (0.22) $ (0.32) |
Schedule of dividends and distributions to common shareholders and noncontrolling interests | Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Common shareholders (dividends) $ 348,799 $ 321,052 $ 1,014,048 $ 321,052 Hampton Inn Property noncontrolling interest (distribution) — 358,576 — 358,576 Hanover Square Property noncontrolling interest (distributions) 24,800 16,000 41,200 28,000 Parkway Property noncontrolling interest (distributions) 9,000 — 48,600 — Operating Partnership unit holders (distributions) 4,271 4,271 12,812 4,271 Total dividends and distributions $ 386,870 $ 699,899 $ 1,116,660 $ 711,899 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Information | |
Schedule of property operating revenues, expenses and NOI by product type | For the three months ended September 30, Hotel properties Retail center properties Flex center property Total 2022 2021 2022 2021 2022 2021 2022 2021 Revenues $ 379,309 $ 1,280,338 $ 1,850,797 $ 1,494,219 $ 610,967 $ 263,586 $ 2,841,073 $ 3,038,143 Operating expenses 589,311 960,994 491,889 397,250 189,720 78,045 1,270,920 1,436,289 Bad debt expense — — — 22,140 — 678 — 22,818 Net operating (loss) income $ (210,002) $ 319,344 $ 1,358,908 $ 1,074,829 $ 421,247 $ 184,863 $ 1,570,153 $ 1,579,036 For the nine months ended September 30, Hotel properties Retail center properties Flex center property Total 2022 2021 2022 2021 2022 2021 2022 2021 Revenues $ 1,507,649 $ 4,009,041 $ 4,999,089 $ 4,049,209 $ 1,834,200 $ 630,007 $ 8,340,938 $ 8,688,257 Operating expenses 1,302,114 2,733,578 1,384,061 1,079,014 511,771 196,849 3,197,946 4,009,441 Bad debt expense — — 7,954 25,336 4,992 678 12,946 26,014 Net operating income $ 205,535 $ 1,275,463 $ 3,607,074 $ 2,944,859 $ 1,317,437 $ 432,480 $ 5,130,046 $ 4,652,802 |
Organization and Basis of Pre_2
Organization and Basis of Presentation and Consolidations (Details) - ft² | Sep. 30, 2022 | Aug. 27, 2022 | Jun. 13, 2022 | Sep. 30, 2021 |
Hampton Inn Property | ||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||
Ownership percentage by noncontrolling owners | 22% | |||
Hanover Square Property | ||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||
Percentage by parent | 84% | |||
Ownership percentage by noncontrolling owners | 16% | 16% | ||
Parkway Property | ||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||
Percentage by parent | 82% | |||
Ownership percentage by noncontrolling owners | 18% | |||
Greenbrier Business Center Property | ||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||
Area of building | 89,280 | 89,290 | ||
Lancer Center Shopping Center | ||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||
Area of building | 181,590 | |||
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 | |||
Hanover Square Property | Hanover Square Property | ||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||
Percentage by parent | 84% | |||
Ownership percentage by noncontrolling owners | 16% | |||
Ashley Plaza Property | ||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||
Area of building | 164,012 | |||
Brookfield Center Property | ||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||
Area of building | 64,880 | |||
Parkway Property | ||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||
Area of building | 64,109 | |||
Parkway Property | Parkway Property | ||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||
Percentage by parent | 82% | |||
Ownership percentage by noncontrolling owners | 18% | |||
Salisbury Marketplace Property | ||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||
Area of building | 79,732 | 79,732 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Intangible Assets and Liabilities (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Intangible Assets | ||
Net intangible assets | $ 4,065,995 | $ 4,200,392 |
Intangible Liabilities | ||
Below market leases | (2,344,281) | (1,880,612) |
Leasing commissions | ||
Intangible Assets | ||
Net intangible assets | 1,196,385 | 1,153,736 |
Legal and marketing costs | ||
Intangible Assets | ||
Net intangible assets | 187,197 | 163,019 |
Above market leases | ||
Intangible Assets | ||
Net intangible assets | 239,375 | 360,509 |
Net leasehold asset | ||
Intangible Assets | ||
Net intangible assets | $ 2,443,038 | $ 2,523,128 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Rental Revenue Related to Above and Below Market Leases (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ (324,292) | $ (275,935) | $ (1,037,800) | $ (696,011) |
Amortization of below market leases | 115,679 | 73,174 | 305,456 | 183,153 |
Amortization of above and below market leases | 81,817 | 5,968 | 146,068 | 2,350 |
Above market leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ (33,862) | $ (67,206) | $ (159,388) | $ (180,803) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Related to Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ (324,292) | $ (275,935) | $ (1,037,800) | $ (696,011) |
Leasing commissions | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | (62,882) | (54,798) | (185,331) | (146,473) |
Legal and marketing costs | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | (18,533) | (9,738) | (48,000) | (23,620) |
Net leasehold asset | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ (242,877) | $ (211,399) | $ (804,469) | $ (525,918) |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Future Amortization of Above and Below Market Leases (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Intangible Assets | ||
For the remaining three months ending December 31, 2022 | $ 317,286 | |
2023 | 1,002,617 | |
2024 | 659,308 | |
2025 | 486,931 | |
2026 | 335,567 | |
2027-2041 | 1,264,286 | |
Intangible assets, net | 4,065,995 | $ 4,200,392 |
Intangible Liabilities | ||
For the remaining three months ending December 31, 2022 | (110,169) | |
2023 | (368,802) | |
2024 | (285,892) | |
2025 | (213,348) | |
2026 | (178,776) | |
2027 - 2041 | (1,187,294) | |
Below market leases | (2,344,281) | (1,880,612) |
Leasing commissions | ||
Intangible Assets | ||
For the remaining three months ending December 31, 2022 | 60,963 | |
2023 | 219,221 | |
2024 | 173,352 | |
2025 | 145,550 | |
2026 | 107,312 | |
2027-2041 | 489,987 | |
Intangible assets, net | 1,196,385 | 1,153,736 |
Legal and marketing costs | ||
Intangible Assets | ||
For the remaining three months ending December 31, 2022 | 17,759 | |
2023 | 61,506 | |
2024 | 39,837 | |
2025 | 24,004 | |
2026 | 13,160 | |
2027-2041 | 30,931 | |
Intangible assets, net | 187,197 | 163,019 |
Above market leases | ||
Intangible Assets | ||
For the remaining three months ending December 31, 2022 | 29,515 | |
2023 | 97,960 | |
2024 | 45,608 | |
2025 | 21,526 | |
2026 | 15,629 | |
2027-2041 | 29,137 | |
Intangible assets, net | 239,375 | 360,509 |
Net leasehold asset | ||
Intangible Assets | ||
For the remaining three months ending December 31, 2022 | 209,049 | |
2023 | 623,930 | |
2024 | 400,511 | |
2025 | 295,851 | |
2026 | 199,466 | |
2027-2041 | 714,231 | |
Intangible assets, net | $ 2,443,038 | $ 2,523,128 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Investment Properties, Assets Held for Sale and Intangible Assets and Liabilities, net (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) tenant | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Real Estate [Line Items] | |||||
Number tenants defaulted | tenant | 2 | ||||
Loss on impairment - intangible assets | $ 0 | $ 0 | $ 36,670 | $ 0 | |
Loss on impairment | 0 | 0 | 36,670 | 0 | |
Impairment of assets held for sale | $ 0 | 175,671 | $ 0 | ||
Accumulated amortization of lease origination costs, leases in place and legal and marketing costs | 2,148,833 | 2,148,833 | $ 2,779,370 | ||
Write off of fully amortized intangible assets | 166,029 | 1,663,228 | |||
Write Off amortization of tenant defaults | $ 0 | $ 5,108 | |||
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 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Exceeded the FDIC limit | $ 3,306,551 | $ 2,377,633 |
Security deposits | 266,837 | 222,265 |
Escrow deposits | 897,434 | 1,523,837 |
Capital property reserves | 944,850 | $ 1,267,470 |
FDIC Limit | UNITED STATES | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
FDIC Limit, per account | $ 250,000 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Property and Purpose of Reserves (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Capital property reserves | $ 944,850 | $ 1,267,470 |
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 | |
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 | |
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 | 815,561 | 700,000 |
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 | $ 129,289 | 92,349 |
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_11
Summary of Significant Accounting Policies - Share Retirement (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Common stock repurchases | $ 286,543 | |||
Common Stock | ||||
Common stock repurchases (in shares) | 268,070 | |||
Cost of re-purchased common stock | $ 278,277 | |||
Average price of repurchased shares | $ 1.038 | $ 1.038 | ||
Expenses from stock repurchase plan | $ 8,266 | |||
Common stock repurchases | $ 0 | $ 0 | 2,681 | $ 0 |
Additional Paid in Capital | ||||
Common stock repurchases | $ 0 | $ 0 | $ 283,862 | $ 0 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |||||
Unbilled rent | $ 985,089 | $ 985,089 | $ 872,322 | ||
Revenue recognized from the reimbursement of common area maintenance expense | 0 | $ 0 | 0 | $ 0 | |
Lease termination fee income recognized | $ 0 | $ 0 | $ 0 | $ 0 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Aug. 31, 2020 shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) shares | Dec. 31, 2017 USD ($) Partnership item | |
Accounting Policies [Line Items] | |||||||
Allowance for uncollectible tenant receivables | $ 18,219 | $ 18,219 | $ 13,010 | ||||
Percentage of taxable income required to be distributed to shareholders | 90% | ||||||
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 | ||||||
Net (loss) income | $ (1,744,134) | $ (875,466) | $ (3,732,456) | $ (3,824,032) | |||
Noncontrolling Operating Partnership Units | Partnership | 125,000 | ||||||
Number of participate elected for exchange | item | 721 | ||||||
Number of Operating Partnership units into shares of Common Stock | shares | 5,319 | ||||||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||
Less: Net income (loss) attributable to Operating Partnership noncontrolling interests | $ (14,926) | (450) | $ (20,275) | 3,023 | |||
Hampton Inn Property | |||||||
Accounting Policies [Line Items] | |||||||
Amounts incurred for payroll salaries and wages, payroll taxes and other employee benefits | 0 | 250,724 | 0 | 622,844 | |||
Income tax expense | 0 | 0 | |||||
Net loss (income) attributable to noncontrolling interests | 1,590 | 19,845 | |||||
Hampton Inn Property | Noncontrolling Interests | |||||||
Accounting Policies [Line Items] | |||||||
Net (loss) income | 1,590 | 19,845 | |||||
Hanover Square Property | |||||||
Accounting Policies [Line Items] | |||||||
Net loss (income) attributable to noncontrolling interests | 8,468 | (4,591) | 15,421 | (14,398) | |||
Hanover Square Property | Noncontrolling Interests | |||||||
Accounting Policies [Line Items] | |||||||
Net (loss) income | 8,468 | (4,591) | 15,421 | (14,398) | |||
Clemson Best Western Property | |||||||
Accounting Policies [Line Items] | |||||||
Amounts incurred for payroll salaries and wages, payroll taxes and other employee benefits | 198,024 | 119,345 | 469,839 | 339,863 | |||
Income tax expense | 0 | 0 | 0 | 0 | |||
Accrued Income Taxes | $ 9,877 | ||||||
Parkway Property | |||||||
Accounting Policies [Line Items] | |||||||
Net loss (income) attributable to noncontrolling interests | 16,782 | 31,027 | |||||
Parkway Property | Noncontrolling Interests | |||||||
Accounting Policies [Line Items] | |||||||
Net (loss) income | 16,782 | 31,027 | |||||
Hampton Inn Property | |||||||
Accounting Policies [Line Items] | |||||||
Net (loss) income | 7,224 | 90,202 | |||||
Hanover Square Property | |||||||
Accounting Policies [Line Items] | |||||||
Net (loss) income | 52,923 | (28,698) | 96,382 | (89,996) | |||
Parkway Property | |||||||
Accounting Policies [Line Items] | |||||||
Net (loss) income | 93,231 | 172,368 | |||||
Operating Partnership | |||||||
Accounting Policies [Line Items] | |||||||
Net (loss) income | (1,233,543) | (34,331) | (1,671,091) | 147,189 | |||
Operating Partnership | Noncontrolling Interests | |||||||
Accounting Policies [Line Items] | |||||||
Net (loss) income | $ (14,926) | $ (450) | $ (20,275) | $ 3,023 | |||
Percentage of outstanding operating partnership units | 1.21% | 1.31% | |||||
Weighted average of net income (loss) allocated to noncontrolling unit holders | 0.0121 | 0.0131 | 0.0121 | 0.0205 | |||
Operating Partnership | Members of the selling LLC | |||||||
Accounting Policies [Line Items] | |||||||
Investment of non-controlling owner | $ 1,175,000 | ||||||
Retail center property tenant reimbursements | |||||||
Accounting Policies [Line Items] | |||||||
Operating lease income | $ 217,828 | $ 607,646 | |||||
Flex center property tenant reimbursements | |||||||
Accounting Policies [Line Items] | |||||||
Operating lease income | $ 56,310 | $ 143,320 | |||||
Hampton Inn Property | |||||||
Accounting Policies [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 22% | 22% | |||||
Operating Partnership units outstanding | shares | 213,531 | 213,531 | |||||
Hanover Square Property | |||||||
Accounting Policies [Line Items] | |||||||
Percentage by parent | 84% | 84% | |||||
Ownership percentage by noncontrolling owners | 16% | 16% | 16% | 16% | |||
Parkway Property | |||||||
Accounting Policies [Line Items] | |||||||
Percentage by parent | 82% | 82% | |||||
Ownership percentage by noncontrolling owners | 18% | 18% | |||||
Parkway Property | Noncontrolling Interests | |||||||
Accounting Policies [Line Items] | |||||||
Net (loss) income | $ 16,782 | $ 31,027 |
Investment Properties - Investm
Investment Properties - Investment Properties (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Real Estate [Line Items] | ||
Investment properties at cost | $ 85,856,314 | $ 75,896,135 |
Less accumulated depreciation | 8,529,883 | 6,488,220 |
Investment properties, net | 77,326,431 | 69,407,915 |
Land | ||
Real Estate [Line Items] | ||
Investment properties at cost | 16,526,436 | 14,142,555 |
Site improvements | ||
Real Estate [Line Items] | ||
Investment properties at cost | 4,719,926 | 4,431,338 |
Buildings and improvements | ||
Real Estate [Line Items] | ||
Investment properties at cost | $ 64,609,952 | $ 57,322,242 |
Investment Properties - Deferre
Investment Properties - Deferred costs, net of depreciation (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Capitalized leasing commissions, net | $ 508,906 | $ 356,327 |
Capitalized tenant improvements - acquisition cost allocation, net | ||
Capitalized tenant improvements, net | 3,359,767 | 1,840,612 |
Capitalized tenant improvements incurred subsequent to acquisition, net | ||
Capitalized tenant improvements, net | $ 349,317 | $ 257,340 |
Investment Properties - Propert
Investment Properties - Property (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Real Estate [Line Items] | ||||
Depreciation expense | $ 2,471,365 | $ 1,665,203 | ||
Capitalized tenant improvements | $ 97,858 | $ 87,229 | 159,941 | 132,379 |
Capitalized leasing commissions | 24,195 | 33,537 | 223,958 | 45,422 |
Depreciation on capitalized leasing commissions | 26,942 | 17,012 | 71,379 | 47,340 |
Impairment of assets held for sale | 0 | 175,671 | 0 | |
Investment property | ||||
Real Estate [Line Items] | ||||
Depreciation expense | 907,221 | 661,669 | 2,471,365 | 1,665,203 |
Capitalized tenant improvements incurred subsequent to acquisition, net | ||||
Real Estate [Line Items] | ||||
Depreciation on capitalized tenant improvements | 23,968 | 18,587 | 67,964 | 45,446 |
Capitalized tenant improvements - acquisition cost allocation, net | ||||
Real Estate [Line Items] | ||||
Depreciation on capitalized tenant improvements | $ 185,144 | $ 103,229 | $ 441,594 | $ 247,189 |
Investment Properties - Additio
Investment Properties - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||||||
Jun. 13, 2022 USD ($) ft² | Aug. 27, 2021 USD ($) | May 14, 2021 USD ($) ft² | Sep. 30, 2022 USD ($) ft² | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) ft² | Sep. 30, 2021 USD ($) | Aug. 27, 2022 USD ($) ft² | |
Real Estate [Line Items] | ||||||||
Depreciation expense | $ 2,471,365 | $ 1,665,203 | ||||||
Capitalized Tenant Improvements | $ 97,858 | $ 87,229 | 159,941 | 132,379 | ||||
Capitalized Leasing Commissions | 24,195 | 33,537 | 223,958 | 45,422 | ||||
Depreciation on capitalized leasing commissions | $ 26,942 | 17,012 | $ 71,379 | 47,340 | ||||
Lancer Center Property | ||||||||
Real Estate [Line Items] | ||||||||
Area of building | ft² | 178,626 | |||||||
Purchase price of property | $ 10,100,000 | |||||||
Purchase price credit for major repairs | 200,000 | |||||||
Acquisition and closing costs | 305,385 | |||||||
Total investment | 10,205,385 | |||||||
Capitalized loan issuance costs | $ 143,130 | |||||||
Percentage of property leased | 100% | 100% | ||||||
Greenbrier Business Center Property | ||||||||
Real Estate [Line Items] | ||||||||
Area of building | ft² | 89,280 | 89,280 | 89,290 | |||||
Purchase price of property | $ 7,250,000 | |||||||
Acquisition and closing costs | 178,763 | |||||||
Total investment | $ 7,578,762 | |||||||
Capitalized loan issuance costs | $ 13,400 | |||||||
Percentage of property leased | 85% | 85% | ||||||
Salisbury Marketplace Property | ||||||||
Real Estate [Line Items] | ||||||||
Area of building | ft² | 79,732 | 79,732 | 79,732 | |||||
Purchase price of property | $ 10,025,000 | |||||||
Acquisition and closing costs | 254,714 | |||||||
Total investment | 10,279,714 | |||||||
Percentage of property leased | 91.20% | 91.20% | ||||||
Parkway Property | ||||||||
Real Estate [Line Items] | ||||||||
Area of building | ft² | 64,109 | 64,109 | ||||||
Salisbury Marketplace Property | Lancer Center Property | ||||||||
Real Estate [Line Items] | ||||||||
Capitalized loan issuance costs | $ 18,847 | |||||||
Investment property | ||||||||
Real Estate [Line Items] | ||||||||
Depreciation expense | $ 907,221 | $ 661,669 | $ 2,471,365 | $ 1,665,203 |
Investment Properties - Assets
Investment Properties - Assets held for sale and liabilities associated with assets held for sale (Details) | Dec. 31, 2021 USD ($) |
Long Lived Assets Held-for-sale [Line Items] | |
Total assets held for sale | $ 9,846,208 |
Total liabilities associated with assets held for sale | 7,615,368 |
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 |
Investment properties | |
Long Lived Assets Held-for-sale [Line Items] | |
Total assets held for sale | $ 9,846,208 |
Investment Properties - Sale of
Investment Properties - Sale of investment property (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 29, 2022 | Aug. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
REVENUE | ||||||
Total Revenue | $ 2,841,073 | $ 3,038,143 | $ 8,340,938 | $ 8,688,257 | ||
OPERATING EXPENSES | ||||||
Hotel property operating expenses | 589,311 | 960,994 | 1,302,114 | 2,733,578 | ||
Depreciation and amortization | 1,231,513 | 937,604 | 3,509,165 | 2,361,214 | ||
Total Operating Expenses | 3,113,383 | 3,090,999 | 8,841,078 | 8,215,010 | ||
Loss (gain) on disposal of investment properties | (389,471) | 124,641 | (389,471) | 124,641 | ||
Operating (loss) income | (881,313) | 71,785 | (1,278,818) | 597,888 | ||
Interest Expense | 989,255 | 950,770 | 2,704,835 | 4,609,198 | ||
Net Loss from Operations | (1,870,568) | (878,985) | (3,983,653) | (4,011,310) | ||
Net Loss | (1,744,134) | (875,466) | (3,732,456) | (3,824,032) | ||
Net income (loss) attributable to Operating Partnership noncontrolling interests | (14,926) | (450) | (20,275) | 3,023 | ||
Net Loss Attributable to Medalist Common Shareholders | (1,754,458) | (872,015) | (3,758,629) | (3,832,502) | ||
Clemson Best Western Hotel Property and Hampton Inn Property | ||||||
REVENUE | ||||||
Total Revenue | 379,309 | 1,280,338 | 1,507,649 | 4,009,041 | ||
OPERATING EXPENSES | ||||||
Hotel property operating expenses | 589,311 | 960,994 | 1,302,114 | 2,733,578 | ||
Total Operating Expenses | 589,311 | 960,994 | 1,302,114 | 2,733,578 | ||
Loss (gain) on disposal of investment properties | (389,471) | 124,641 | (389,471) | 124,641 | ||
Operating (loss) income | (599,473) | 443,985 | (183,936) | 1,400,104 | ||
Interest Expense | 147,589 | 260,043 | 426,757 | 924,339 | ||
Net Loss from Operations | (747,062) | 183,942 | (610,693) | 475,765 | ||
Other income (expense) | (172) | (201) | (48) | (190) | ||
Net Loss | (747,234) | 183,741 | (610,741) | 475,575 | ||
Net income (loss) attributable to Operating Partnership noncontrolling interests | (11,697) | 2,387 | (12,040) | 12,329 | ||
Net Loss Attributable to Medalist Common Shareholders | (735,537) | 179,764 | (598,701) | 443,401 | ||
Clemson Best Western Hotel Property | ||||||
Real Estate [Line Items] | ||||||
Proceeds from sale of property | $ 10,015,000 | |||||
OPERATING EXPENSES | ||||||
Loss (gain) on disposal of investment properties | 389,471 | 389,471 | ||||
Hampton Inn Property | ||||||
Real Estate [Line Items] | ||||||
Proceeds from sale of property | $ 12,900,000 | |||||
OPERATING EXPENSES | ||||||
Loss (gain) on disposal of investment properties | 124,641 | 124,641 | ||||
Interest Expense | 118,077 | 475,844 | ||||
Net loss (income) attributable to noncontrolling interests | 1,590 | 19,845 | ||||
Hotel property room revenues | ||||||
REVENUE | ||||||
Total Revenue | 376,560 | 1,262,406 | 1,494,836 | 3,970,548 | ||
Hotel property room revenues | Clemson Best Western Hotel Property and Hampton Inn Property | ||||||
REVENUE | ||||||
Total Revenue | 376,560 | 1,262,406 | 1,494,836 | 3,970,548 | ||
Hotel property other revenues | ||||||
REVENUE | ||||||
Total Revenue | 2,749 | 17,932 | 12,813 | 38,493 | ||
Hotel property other revenues | Clemson Best Western Hotel Property and Hampton Inn Property | ||||||
REVENUE | ||||||
Total Revenue | $ 2,749 | $ 17,932 | $ 12,813 | $ 38,493 |
Investment Properties - 2022 Ac
Investment Properties - 2022 Acquisition (Details) - USD ($) | Jun. 13, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Real Estate [Line Items] | |||
Investment property | $ 77,326,431 | $ 69,407,915 | |
Salisbury Marketplace Property | |||
Real Estate [Line Items] | |||
Investment property | $ 9,963,258 | ||
Lease intangibles and other assets | 1,045,189 | ||
Above market leases | 40,392 | ||
Below market leases | (769,125) | ||
Fair value of net assets acquired | 10,279,714 | ||
Purchase consideration: | |||
Consideration paid with cash | 3,746,561 | ||
Consideration paid with new mortgage debt, net | 6,533,153 | ||
Total consideration | $ 10,279,714 |
Investment Properties - 2021 Ac
Investment Properties - 2021 Acquisition (Details) - USD ($) | Aug. 27, 2021 | May 14, 2021 | Sep. 30, 2022 | Dec. 31, 2021 |
Real Estate [Line Items] | ||||
Investment property | $ 77,326,431 | $ 69,407,915 | ||
Lancer Center Property | ||||
Real Estate [Line Items] | ||||
Investment property | $ 9,902,876 | |||
Lease intangibles and other assets | 1,023,753 | |||
Above market leases | 157,438 | |||
Below market leases | (878,682) | |||
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 | |||
Total consideration | $ 10,205,385 | |||
Greenbrier Business Center Property | ||||
Real Estate [Line Items] | ||||
Investment property | $ 6,896,803 | |||
Lease intangibles and other assets | 583,940 | |||
Restricted cash acquired | 150,000 | |||
Above market leases | 48,186 | |||
Below market leases | (100,167) | |||
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 | |||
Total consideration | 7,578,762 | |||
Combined Lancer Center and Greenbrier Business Center Properties | ||||
Real Estate [Line Items] | ||||
Investment property | 16,799,679 | |||
Lease intangibles and other assets | 1,607,693 | |||
Restricted cash acquired | 150,000 | |||
Above market leases | 205,624 | |||
Below market leases | (978,849) | |||
Fair value of net assets acquired | 17,784,147 | |||
Purchase consideration: | ||||
Consideration paid with cash | 6,880,677 | |||
Consideration paid with new mortgage debt, net | 6,421,870 | |||
Consideration paid with assumed mortgage debt, net | 4,481,600 | |||
Total consideration | $ 17,784,147 |
Mandatorily Redeemable Prefer_3
Mandatorily Redeemable Preferred Stock (Details) | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||||
Oct. 20, 2022 $ / shares | Jul. 21, 2022 $ / shares | Apr. 21, 2022 $ / shares | Jan. 20, 2022 $ / shares | Oct. 27, 2021 $ / shares | Jul. 26, 2021 $ / shares | Apr. 30, 2021 $ / shares | Feb. 01, 2021 $ / shares | Oct. 26, 2020 $ / shares | Jul. 24, 2020 $ / shares | Apr. 27, 2020 $ / shares | Feb. 19, 2020 USD ($) period director $ / shares shares | Feb. 09, 2020 USD ($) $ / shares | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Apr. 01, 2022 $ / shares | Mar. 21, 2022 $ / shares | Mar. 17, 2022 $ / shares | Mar. 14, 2022 $ / shares | Mar. 03, 2022 $ / shares | Dec. 31, 2021 USD ($) | Apr. 13, 2021 $ / shares | |
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||||||||||||||||||||||
Price Per Share | $ / shares | $ 1.0745 | $ 1.0547 | $ 1.076 | $ 1.050 | $ 1.088 | $ 1.50 | ||||||||||||||||||
Dividends paid (in dollars per share) | $ / shares | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.37 | |||||||||||||
Mandatorily redeemable preferred stock. | ||||||||||||||||||||||||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||||||||||||||||||||||
Preferred stock issuances (shares) | shares | 200,000 | |||||||||||||||||||||||
Price Per Share | $ / shares | $ 23 | $ 23 | ||||||||||||||||||||||
Gross proceeds | $ 4,600,000 | |||||||||||||||||||||||
Net proceeds of the redeemable preferred stock | 3,860,882 | |||||||||||||||||||||||
Aggregate liquidation preference | $ 5,000,000 | |||||||||||||||||||||||
Preferred Stock, dividend rate (as a percent) | 8% | 8% | ||||||||||||||||||||||
Defaulted dividend payment quarterly periods, number | period | 6 | |||||||||||||||||||||||
Number of additional directors, who can be elected | director | 2 | |||||||||||||||||||||||
Accrued but unpaid dividends | $ 70,004 | $ 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 | 56,311 | $ 51,637 | 165,338 | $ 151,616 | ||||||||||||||||||||
Accumulated amortization of the discount and deferred financing costs | $ 532,096 | $ 532,096 | $ 366,758 |
Loans Payable - Mortgages Payab
Loans Payable - Mortgages Payables, Net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |
Jun. 13, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Mortgages Payable | |||||
Loans Payable | |||||
Unamortized issuance costs, net | $ (752,580) | $ (752,580) | $ (825,544) | ||
Total mortgages payable, net | $ 61,552,851 | $ 61,552,851 | $ 54,517,822 | ||
Franklin Square Property | Mortgages Payable | |||||
Loans Payable | |||||
Monthly Payment | Interest only | ||||
Interest Rate | 3.808% | 3.808% | |||
Maturity | 2031-12 | 2031-12 | |||
Mortgages payable | $ 13,250,000 | $ 13,250,000 | $ 13,250,000 | ||
Hanover Square Property | Mortgages Payable | |||||
Loans Payable | |||||
Monthly Payment | $ 56,882 | ||||
Interest Rate | 4.25% | 4.25% | |||
Maturity | 2027-12 | 2027-12 | |||
Mortgages payable | $ 9,943,087 | $ 9,943,087 | $ 10,134,667 | ||
Ashley Plaza Property | Mortgages Payable | |||||
Loans Payable | |||||
Monthly Payment | $ 52,795 | ||||
Interest Rate | 3.75% | 3.75% | |||
Maturity | 2029-09 | 2029-09 | |||
Mortgages payable | $ 10,966,333 | $ 10,966,333 | $ 11,127,111 | ||
Clemson Best Western Property | |||||
Loans Payable | |||||
Unamortized loan issuance costs written off | $ 134,632 | ||||
Brookfield Center Property. | Mortgages Payable | |||||
Loans Payable | |||||
Monthly Payment | $ 22,876 | ||||
Interest Rate | 3.90% | 3.90% | |||
Maturity | 2029-11 | 2029-11 | |||
Mortgages payable | $ 4,685,210 | $ 4,685,210 | $ 4,758,344 | ||
Parkway Property | |||||
Loans Payable | |||||
Maturity | 2026-10 | 2026-10 | |||
Parkway Property | Mortgages Payable | |||||
Loans Payable | |||||
Monthly Payment | 19,720 | ||||
Mortgages payable | $ 5,010,286 | $ 5,010,286 | $ 5,090,210 | ||
Wells Fargo Facility | Mortgages Payable | |||||
Loans Payable | |||||
Monthly Payment | 103,438 | ||||
Monthly Payment | $ 103,438 | ||||
Interest Rate | 4.50% | 4.50% | 4.50% | ||
Maturity | 2027-06 | 2027-06 | |||
Mortgages payable | $ 18,450,515 | $ 18,450,515 | |||
Lancer Center Property | Mortgages Payable | |||||
Loans Payable | |||||
Monthly Payment | $ 34,667 | ||||
Interest Rate | 4% | 4% | |||
Mortgages payable | $ 6,488,034 | ||||
Greenbrier Business Center Property | Mortgages Payable | |||||
Loans Payable | |||||
Monthly Payment | $ 23,873 | ||||
Interest Rate | 4% | 4% | |||
Mortgages payable | $ 4,495,000 |
Loans Payable - Assets held for
Loans Payable - Assets held for sale (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Total mortgages payable, net, associated with assets held for sale | $ 7,615,368 | |
Mortgages payable, net, associated with assets held for sale | ||
Debt Instrument [Line Items] | ||
Unamortized issuance costs, net | (134,632) | |
Total mortgages payable, net, associated with assets held for sale | $ 7,615,368 | |
Mortgages payable, net, associated with assets held for sale | Clemson Best Western Property | ||
Debt Instrument [Line Items] | ||
Monthly Payment | Interest only | Interest only |
Interest Rate | Variable | Variable |
Maturity | 2022-10 | 2022-10 |
Mortgage Payable Gross | $ 7,750,000 |
Loans Payable - Convertible deb
Loans Payable - Convertible debenture (Details) - USD ($) | 2 Months Ended | 9 Months Ended | ||||
Jan. 05, 2021 | Dec. 22, 2020 | Oct. 27, 2020 | Jan. 05, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Conversion [Line Items] | ||||||
Net proceeds | $ 1,305,000 | |||||
Convertible Debentures | ||||||
Debt Conversion [Line Items] | ||||||
Discount rate | 5% | 5% | ||||
Accrue interest rate | 5% | |||||
Principal Amount | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | |||
Discount | (250,000) | (250,000) | ||||
Debt Issuance Costs - Cash | (518,517) | |||||
Net proceeds | 4,231,483 | 4,231,483 | ||||
Beneficial conversion feature | $ 946,840 | |||||
Debt instrument term | 1 year | |||||
Tranche 1 | ||||||
Debt Conversion [Line Items] | ||||||
Principal Amount | 1,500,000 | |||||
Discount | (75,000) | |||||
Debt Issuance Costs - Cash | (155,555) | |||||
Net proceeds | $ 1,269,445 | |||||
Tranche 2 | ||||||
Debt Conversion [Line Items] | ||||||
Principal Amount | $ 2,000,000 | |||||
Discount | (100,000) | |||||
Debt Issuance Costs - Cash | (207,407) | |||||
Net proceeds | $ 1,692,593 | |||||
Tranche 3 | ||||||
Debt Conversion [Line Items] | ||||||
Principal Amount | 1,500,000 | 1,500,000 | ||||
Discount | (75,000) | $ (75,000) | ||||
Debt Issuance Costs - Cash | (155,555) | |||||
Net proceeds | $ 1,269,445 |
Loans Payable - Wells Fargo Lin
Loans Payable - Wells Fargo Line of Credit (Details) - Wells Fargo Line of Credit - USD ($) | Jun. 13, 2022 | Sep. 30, 2022 |
Loans Payable | ||
Line of credit, maximum borrowing capacity | $ 1,500,000 | |
Line of credit, outstanding balance | $ 0 | |
Term of loan | 1 year |
Loans Payable - Convertible (De
Loans Payable - Convertible (Details) | 2 Months Ended | 9 Months Ended | |||||||
May 11, 2021 USD ($) $ / shares shares | Jan. 06, 2021 USD ($) $ / shares shares | Jan. 05, 2021 USD ($) | Dec. 22, 2020 USD ($) | Oct. 27, 2020 USD ($) | Jan. 05, 2021 USD ($) | Sep. 30, 2022 USD ($) D $ / shares | Sep. 30, 2021 USD ($) | Dec. 31, 2020 $ / shares | |
Debt Conversion [Line Items] | |||||||||
Net proceeds | $ 1,305,000 | ||||||||
Convertible Debentures | |||||||||
Debt Conversion [Line Items] | |||||||||
Net proceeds | $ 4,231,483 | $ 4,231,483 | |||||||
Principal Amount | 5,000,000 | $ 5,000,000 | 5,000,000 | ||||||
Debt Issuance Costs - Cash | (518,517) | ||||||||
Beneficial conversion feature | $ (946,840) | ||||||||
Percent of the volume-weighted average share price used to calculate the conversion price | 88% | ||||||||
Number of days preceding the conversion date used to determine the conversion price | D | 10 | ||||||||
Redemption premium percent | 15% | ||||||||
Number of days to provide written notice to elect conversion | D | 10 | ||||||||
Accrued and Principal Amount Converted | $ 5,000,000 | $ 5,000,000 | |||||||
Unpaid Interest Converted | $ 58,788 | $ 58,788 | |||||||
Common Conversion Price | $ / shares | $ 1.59 | $ 1.59 | $ 2.47 | ||||||
Shares Issued | shares | 3,181,916 | 3,181,916 | |||||||
Convertible Debentures | Minimum | |||||||||
Debt Conversion [Line Items] | |||||||||
Common Conversion Price | $ / shares | $ 0.6175 | ||||||||
Tranche 1 | |||||||||
Debt Conversion [Line Items] | |||||||||
Net proceeds | 1,269,445 | ||||||||
Principal Amount | 1,500,000 | ||||||||
Debt Issuance Costs - Cash | $ (155,555) | ||||||||
Tranche 2 | |||||||||
Debt Conversion [Line Items] | |||||||||
Net proceeds | $ 1,692,593 | ||||||||
Principal Amount | 2,000,000 | ||||||||
Debt Issuance Costs - Cash | $ (207,407) | ||||||||
Tranche 3 | |||||||||
Debt Conversion [Line Items] | |||||||||
Net proceeds | 1,269,445 | ||||||||
Principal Amount | 1,500,000 | $ 1,500,000 | |||||||
Debt Issuance Costs - Cash | $ (155,555) |
Loans Payable - Interest expens
Loans Payable - Interest expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | ||||
Mortgage Interest Expense | $ 804,872 | $ 776,666 | $ 2,157,242 | $ 2,294,407 |
Amortization of discounts and capitalized issuance costs | 83,301 | 71,760 | 245,945 | 1,950,814 |
Other interest expense | 101,082 | 102,344 | 301,648 | 363,977 |
Total interest expense | 989,255 | 950,770 | 2,704,835 | 4,609,198 |
Amortization and preferred stock dividends on mandatorily redeemable preferred stock | ||||
Debt Instrument [Line Items] | ||||
Amortization of discounts and capitalized issuance costs | 56,311 | 51,637 | 165,338 | 151,616 |
Other interest expense | 100,000 | 100,000 | 300,000 | 300,000 |
Total interest expense | 156,311 | 151,637 | 465,338 | 451,616 |
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 | |||
Total interest expense | 1,760,973 | |||
Other interest | ||||
Debt Instrument [Line Items] | ||||
Other interest expense | 332 | 5,100 | ||
Total interest expense | 332 | 5,100 | ||
Franklin Square Property | ||||
Debt Instrument [Line Items] | ||||
Mortgage Interest Expense | 128,943 | 171,458 | 382,625 | 508,783 |
Amortization of discounts and capitalized issuance costs | 7,093 | 2,317 | 21,279 | 6,961 |
Total interest expense | 136,036 | 173,775 | 403,904 | 515,744 |
Hanover Square Property | ||||
Debt Instrument [Line Items] | ||||
Mortgage Interest Expense | 108,222 | 108,571 | 319,640 | 328,636 |
Amortization of discounts and capitalized issuance costs | 3,223 | 3,223 | 9,668 | 9,680 |
Total interest expense | 111,445 | 111,794 | 329,308 | 338,316 |
Hampton Inn Property | ||||
Debt Instrument [Line Items] | ||||
Mortgage Interest Expense | 116,422 | 456,300 | ||
Amortization of discounts and capitalized issuance costs | 9,000 | |||
Other interest expense | 1,655 | 10,544 | ||
Total interest expense | 118,077 | 475,844 | ||
Ashley Plaza Property | ||||
Debt Instrument [Line Items] | ||||
Mortgage Interest Expense | 105,438 | 107,459 | 314,378 | 320,316 |
Amortization of discounts and capitalized issuance costs | 4,357 | 4,358 | 13,072 | 13,074 |
Total interest expense | 109,795 | 111,817 | 327,450 | 333,390 |
Clemson Best Western Property | ||||
Debt Instrument [Line Items] | ||||
Mortgage Interest Expense | 146,507 | 141,609 | 425,109 | 420,211 |
Amortization of discounts and capitalized issuance costs | 22,437 | |||
Other interest expense | 1,082 | 357 | 1,648 | 5,847 |
Total interest expense | 147,589 | 141,966 | 426,757 | 448,495 |
Brookfield Center Property. | ||||
Debt Instrument [Line Items] | ||||
Mortgage Interest Expense | 46,844 | 47,708 | 139,646 | 142,188 |
Amortization of discounts and capitalized issuance costs | 2,838 | 2,838 | 8,513 | 8,514 |
Total interest expense | 49,682 | 50,546 | 148,159 | 150,702 |
Lancer Centers Property | ||||
Debt Instrument [Line Items] | ||||
Mortgage Interest Expense | 65,959 | 115,179 | 100,493 | |
Amortization of discounts and capitalized issuance costs | 7,156 | 11,928 | 10,814 | |
Total interest expense | $ 73,115 | 127,107 | 111,307 | |
Greenbrier Business Center Property | ||||
Debt Instrument [Line Items] | ||||
Mortgage Interest Expense | 81,409 | 17,480 | ||
Amortization of discounts and capitalized issuance costs | 1,155 | 231 | ||
Total interest expense | 82,564 | $ 17,711 | ||
Parkway Center | ||||
Debt Instrument [Line Items] | ||||
Mortgage Interest Expense | 56,023 | 124,490 | ||
Amortization of discounts and capitalized issuance costs | 2,757 | 8,270 | ||
Total interest expense | 58,780 | 132,760 | ||
Wells Fargo Facility | ||||
Debt Instrument [Line Items] | ||||
Mortgage Interest Expense | 212,895 | 254,766 | ||
Amortization of discounts and capitalized issuance costs | 6,722 | 6,722 | ||
Total interest expense | $ 219,617 | $ 261,488 |
Loans Payable - Interest accrue
Loans Payable - Interest accrued and accumulated amortization of capitalized issuance costs (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Accrued interest | $ 169,712 | $ 219,476 |
Accumulated amortization of capitalized issuance costs | 717,034 | 637,688 |
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 | 532,096 | 366,758 |
Franklin Square Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 42,046 | |
Accumulated amortization of capitalized issuance costs | 23,643 | 2,364 |
Hanover Square Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 37,562 | 38,287 |
Accumulated amortization of capitalized issuance costs | 56,658 | 46,990 |
Ashley Plaza Property | ||
Debt Instrument [Line Items] | ||
Accumulated amortization of capitalized issuance costs | 53,752 | 40,679 |
Clemson Best Western Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 47,716 | |
Accumulated amortization of capitalized issuance costs | 134,622 | |
Brookfield Center Property. | ||
Debt Instrument [Line Items] | ||
Accrued interest | 15,979 | |
Accumulated amortization of capitalized issuance costs | 34,055 | 25,542 |
Lancer 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 | 20,100 | 9,966 |
Accumulated amortization of capitalized issuance costs | 10,108 | $ 1,838 |
Wells Fargo Facility | ||
Debt Instrument [Line Items] | ||
Accumulated amortization of capitalized issuance costs | $ 6,722 |
Loans Payable - Principal Repay
Loans Payable - Principal Repayments on Indebtedness (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Mortgages Payable | ||
Debt Instrument [Line Items] | ||
For the remaining three months ending December 31, 2022 | $ 269,798 | |
2023 | 1,101,643 | |
2024 | 1,142,095 | |
2025 | 1,429,359 | |
2026 | 1,488,466 | |
Thereafter | 56,874,070 | |
Total principal payments and debt maturities | 62,305,431 | |
Unamortized issuance costs, net | (752,580) | $ (825,544) |
Total mortgages payable, net | $ 61,552,851 | 54,517,822 |
Mortgages payable, net, associated with assets held for sale | ||
Debt Instrument [Line Items] | ||
Unamortized issuance costs, net | $ (134,632) |
Loans Payable - Additional Info
Loans Payable - Additional Information (Details) | 2 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||
Jan. 01, 2023 | Sep. 30, 2022 USD ($) | Jun. 13, 2022 USD ($) | Dec. 31, 2021 USD ($) | Nov. 08, 2021 USD ($) | Oct. 28, 2021 | Oct. 06, 2021 USD ($) | Mar. 31, 2021 | Oct. 27, 2020 USD ($) | Jan. 05, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2022 USD ($) | May 11, 2021 item | Jan. 06, 2021 item | |
Debt Instrument [Line Items] | ||||||||||||||||||
Debt service coverage ratio | not less than 1.50 to 1.00 | |||||||||||||||||
Cash | $ 4,863,963 | $ 4,370,405 | $ 4,863,963 | $ 8,526,063 | $ 4,863,963 | $ 8,526,063 | $ 4,370,405 | |||||||||||
Number of conversations | item | 17 | 17 | ||||||||||||||||
Escrows fund | 897,434 | 1,523,837 | 897,434 | 897,434 | 1,523,837 | |||||||||||||
Loss on extinguishment of debt | (219,532) | (389,207) | ||||||||||||||||
Fees paid | 84,900 | |||||||||||||||||
Mortgages Payable | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Mortgages payables | 61,552,851 | 54,517,822 | 61,552,851 | 61,552,851 | 54,517,822 | |||||||||||||
Unamortized issuance costs, net | 752,580 | 825,544 | 752,580 | 752,580 | 825,544 | |||||||||||||
Mortgages payable, net, associated with assets held for sale | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Unamortized issuance costs, net | 134,632 | 134,632 | ||||||||||||||||
Wells Fargo Line of Credit | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 2.25% | |||||||||||||||||
Term of loan | 1 year | |||||||||||||||||
Parkway Property | Interest Rate Protection Transaction | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Interest rate exposure cap | 5.25% | |||||||||||||||||
Description of interest rate | capped at 5.25 percent if USD 1-Month ICE LIBOR exceeds 3 percent | |||||||||||||||||
Fair value of derivative | $ 283,461 | $ 37,350 | $ 283,461 | $ 283,461 | 37,350 | |||||||||||||
Parkway Property | Interest Rate Protection Transaction | ICE LIBOR | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Description of interest rate | 3.143 | 0.102 | ||||||||||||||||
Basis spread on variable rate | 3% | |||||||||||||||||
Franklin Square Property | Mortgages Payable | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maturity extension period | 30 days | |||||||||||||||||
Additional maturity period | 30 days | |||||||||||||||||
Cash proceeds used to fund escrows and to repay the remaining balance of the original mortgage loan. | $ 2,242,273 | |||||||||||||||||
Interest Rate | 3.808% | 3.808% | 3.808% | |||||||||||||||
Term of loan | 10 years | |||||||||||||||||
Refinance with new mortgage payable | $ 13,250,000 | $ 13,250,000 | $ 13,250,000 | $ 13,250,000 | 13,250,000 | |||||||||||||
Net worth to be maintained by the entity (excluding mortgaged property's assets and liabilities) | $ 13,250,000 | $ 13,250,000 | $ 13,250,000 | |||||||||||||||
Principal Amount | $ 13,250,000 | $ 14,275,000 | ||||||||||||||||
Amortization schedule of the mortgage loan | 30 years | |||||||||||||||||
Loan issuance costs | $ 283,721 | |||||||||||||||||
Minimum liquid assets to be maintained | 1,000,000 | 1,000,000 | $ 1,000,000 | |||||||||||||||
Franklin Square Property | Mortgages Payable | Monthly payments till January 6, 2025 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Interest Rate | 3.808% | 3.808% | 3.808% | |||||||||||||||
Fixed monthly payment including principal and interest | $ 61,800 | |||||||||||||||||
Hanover Square Property | Mortgages Payable | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Interest Rate | 4.25% | 4.25% | 4.25% | |||||||||||||||
Term of loan | 5 years | |||||||||||||||||
Debt service coverage ratio | excess of 1.35 | |||||||||||||||||
Loan-to-value of real estate ratio | 75% | |||||||||||||||||
Refinance with new mortgage payable | $ 9,943,087 | 10,134,667 | $ 9,943,087 | $ 9,943,087 | 10,134,667 | |||||||||||||
Fixed monthly payment including principal and interest | $ 56,882 | |||||||||||||||||
Amortization schedule of the mortgage loan | 25 years | |||||||||||||||||
Hanover Square Property | Mortgages Payable | US Treasury Securities Interest Rate | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 3% | |||||||||||||||||
Hanover Square Property | Mortgages Payable | US Treasury Securities Interest Rate | Minimum | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Interest Rate | 4.25% | |||||||||||||||||
Ashley Plaza Property | Mortgages Payable | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Interest Rate | 3.75% | 3.75% | 3.75% | |||||||||||||||
Refinance with new mortgage payable | $ 10,966,333 | 11,127,111 | $ 10,966,333 | $ 10,966,333 | $ 11,127,111 | |||||||||||||
Fixed monthly payment including principal and interest | $ 52,795 | |||||||||||||||||
Amortization schedule of the mortgage loan | 30 years | |||||||||||||||||
Clemson Best Western Property | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Loss on extinguishment of debt | 219,532 | |||||||||||||||||
Fees paid | 84,900 | |||||||||||||||||
Debt refinancing charges | $ 227,164 | $ 0 | $ 227,164 | $ 0 | ||||||||||||||
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 | |||||||||||||||||
Effective interest rate | 7.15% | 7.15% | ||||||||||||||||
Refinance with new mortgage payable | 7,750,000 | $ 7,750,000 | ||||||||||||||||
Clemson Best Western Property | Mortgages payable, net, associated with assets held for sale | Minimum | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Interest Rate | 7.15% | |||||||||||||||||
Clemson Best Western Property | Mortgages payable, net, associated with assets held for sale | LIBOR | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 4.90% | |||||||||||||||||
Lancer Center Property | Mortgages Payable | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Interest Rate | 4% | 4% | 4% | |||||||||||||||
Refinance with new mortgage payable | 6,488,034 | 6,488,034 | ||||||||||||||||
Fixed monthly payment including principal and interest | $ 34,667 | |||||||||||||||||
Amortization schedule of the mortgage loan | 25 years | |||||||||||||||||
Loss on extinguishment of debt | $ 0 | $ 113,282 | ||||||||||||||||
Brookfield Center Property. | Mortgages Payable | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Interest Rate | 3.90% | 3.90% | 3.90% | |||||||||||||||
Refinance with new mortgage payable | $ 4,685,210 | 4,758,344 | $ 4,685,210 | $ 4,685,210 | 4,758,344 | |||||||||||||
Fixed monthly payment including principal and interest | $ 22,876 | |||||||||||||||||
Amortization schedule of the mortgage loan | 30 years | |||||||||||||||||
Greenbrier Business Center Property | Mortgages Payable | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Interest Rate | 4% | 4% | 4% | |||||||||||||||
Refinance with new mortgage payable | 4,495,000 | $ 4,495,000 | ||||||||||||||||
Fixed monthly payment including principal and interest | $ 23,873 | |||||||||||||||||
Amortization schedule of the mortgage loan | 25 years | |||||||||||||||||
Loss on extinguishment of debt | $ 0 | $ 56,393 | ||||||||||||||||
Parkway Property | Mortgages Payable | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Effective interest rate | 4.814% | 2.3493% | ||||||||||||||||
Refinance with new mortgage payable | $ 5,010,286 | $ 5,090,210 | $ 5,010,286 | $ 5,010,286 | $ 5,090,210 | |||||||||||||
Fixed monthly payment including principal and interest | $ 19,720 | |||||||||||||||||
Amortization schedule of the mortgage loan | 30 years | |||||||||||||||||
Parkway Property | Mortgages Payable | LIBOR | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable rate | 2.25% | |||||||||||||||||
Parkway Property | Mortgages Payable | LIBOR | Minimum | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Interest Rate | 2.25% | 2.25% | 2.25% | |||||||||||||||
Wells Fargo Facility | Mortgages Payable | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maturity period | 5 years | |||||||||||||||||
Interest Rate | 4.50% | 4.50% | 4.50% | 4.50% | ||||||||||||||
Refinance with new mortgage payable | $ 18,450,515 | $ 18,450,515 | $ 18,450,515 | |||||||||||||||
Fixed monthly payment including principal and interest | $ 103,438 | |||||||||||||||||
Principal Amount | $ 18,609,500 | |||||||||||||||||
Minimum debt yield | 9.50% | |||||||||||||||||
Amortization schedule of the mortgage loan | 25 years | |||||||||||||||||
Minimum liquid assets to be maintained | $ 1,500,000 | |||||||||||||||||
Convertible Debentures | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Effective interest rate | 5% | |||||||||||||||||
Term of loan | 1 year | |||||||||||||||||
Discount | $ 250,000 | |||||||||||||||||
Debt Issuance Costs | 518,517 | |||||||||||||||||
Principal Amount | $ 5,000,000 | 5,000,000 | ||||||||||||||||
Convertible Debentures | Common Stock | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt issuance costs paid in common shares | $ 123,000 |
Rentals under Operating Lease_2
Rentals under Operating Leases (Details) | Sep. 30, 2022 USD ($) |
Future minimum rents to be received under operating leases | |
For the remaining three months ending December 31, 2022 | $ 1,968,016 |
2023 | 7,533,437 |
2024 | 6,181,843 |
2025 | 5,295,766 |
2026 | 3,795,021 |
Thereafter | 10,193,285 |
Total minimum rents | $ 34,967,368 |
Equity - Standby Equity Purchas
Equity - Standby Equity Purchase Agreement (Details) - USD ($) | 9 Months Ended | ||||||
Apr. 01, 2022 | Mar. 21, 2022 | Mar. 17, 2022 | Mar. 14, 2022 | Mar. 03, 2022 | Apr. 13, 2021 | Sep. 30, 2022 | |
Equity | |||||||
Total Proceeds | $ 350,313 | $ 500,000 | $ 300,000 | $ 290,000 | $ 98,574 | $ 10,886,337 | $ 1,538,887 |
Price Per Share | $ 1.0745 | $ 1.0547 | $ 1.076 | $ 1.050 | $ 1.088 | $ 1.50 | |
Common stock issuances (shares) | 325,732 | 474,068 | 278,810 | 276,190 | 90,600 | 8,000,000 | 1,445,400 |
Equity - Common Stock Repurchas
Equity - Common Stock Repurchase Plan (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||||||||
Jan. 21, 2022 | Jan. 14, 2022 | Jan. 10, 2022 | Jan. 07, 2022 | Jan. 06, 2022 | Jan. 05, 2022 | Jan. 04, 2022 | Jan. 21, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Equity [Line Items] | ||||||||||
Number of common shares approved to repurchase | 500,000 | |||||||||
Total Cost | $ 286,543 | |||||||||
Common Stock Repurchase Plan | ||||||||||
Equity [Line Items] | ||||||||||
Shares Purchased | 39,365 | 100 | 50,000 | 30,000 | 100,000 | 48,205 | 400 | 268,070 | 268,070 | |
Total Cost | $ 39,603 | $ 101 | $ 51,000 | $ 31,500 | $ 104,556 | $ 51,093 | $ 424 | $ 278,277 | $ 278,277 | |
Price Per Share | $ 1.006 | $ 1.010 | $ 1.020 | $ 1.050 | $ 1.046 | $ 1.060 | $ 1.060 | $ 1.006 | ||
Expenses from stock repurchase plan | $ 8,266 | |||||||||
Average price of repurchased shares | $ 1.038 | $ 1.038 | $ 1.038 |
Equity - Earnings Per Common Sh
Equity - Earnings Per Common Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Basic and diluted shares outstanding | ||||
Weighted average Common Shares - basic | 17,439,947 | 16,052,617 | 16,972,322 | 12,106,377 |
Effect of conversion of operating partnership units | 213,531 | 213,531 | 213,531 | 213,531 |
Weighted average common shares - diluted | 17,653,478 | 16,266,148 | 17,185,853 | 12,319,908 |
Calculation of earnings per share - basic and diluted | ||||
Net loss attributable to common shareholders | $ (1,754,458) | $ (872,015) | $ (3,758,629) | $ (3,832,502) |
Weighted-average number of shares - basic | 17,439,947 | 16,052,617 | 16,972,322 | 12,106,377 |
Weighted-average number of shares - diluted | 17,439,947 | 16,052,617 | 16,972,322 | 12,106,377 |
Loss per share from operations - basic | $ (0.10) | $ (0.05) | $ (0.22) | $ (0.32) |
Loss per share from operations - diluted | $ (0.10) | $ (0.05) | $ (0.22) | $ (0.32) |
Equity - Dividends and Distribu
Equity - Dividends and Distributions to Noncontrolling Interests Paid (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Equity [Line Items] | ||||
Common shareholders (dividends) | $ 348,799 | $ 321,052 | $ 1,014,048 | $ 321,052 |
Total dividends and distributions | 386,870 | 699,899 | 1,116,660 | 711,899 |
Hampton Inn Property | ||||
Equity [Line Items] | ||||
Noncontrolling interest (distributions) | 358,576 | 358,576 | ||
Hanover Square Property | ||||
Equity [Line Items] | ||||
Noncontrolling interest (distributions) | 24,800 | 16,000 | 41,200 | 28,000 |
Parkway Property | ||||
Equity [Line Items] | ||||
Noncontrolling interest (distributions) | 9,000 | 48,600 | ||
Operating Partnership unit holders (distributions) | ||||
Equity [Line Items] | ||||
Noncontrolling interest (distributions) | $ 4,271 | $ 4,271 | $ 12,812 | $ 4,271 |
Equity - 2018 Equity Incentive
Equity - 2018 Equity Incentive Plan (Details) - 2018 Equity Incentive Plan | Mar. 02, 2022 USD ($) employee director shares | Mar. 16, 2021 USD ($) director shares | Aug. 23, 2018 shares | Sep. 30, 2022 | Jan. 01, 2022 shares |
Equity [Line Items] | |||||
Number of shares available for issuance under the plan | 904,146 | ||||
Percentage of fully diluted shares of common shares | 8% | ||||
Fair value of grants | $ | $ 233,100 | $ 149,981 | |||
Minimum | |||||
Equity [Line Items] | |||||
Number of shares authorized | 240,000 | ||||
Independent directors | |||||
Equity [Line Items] | |||||
Number of shares granted | 90,000 | 40,356 | |||
Number of directors who received grants | director | 3 | 3 | |||
Employee | |||||
Equity [Line Items] | |||||
Number of shares granted | 60,000 | ||||
Number of employees of the Manager who also serve as directors who received grants | employee | 2 | ||||
Chief financial officer | |||||
Equity [Line Items] | |||||
Number of shares granted | 60,000 | 26,900 | |||
Percent incremental common shares reserved | 8% |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Apr. 01, 2022 | Mar. 21, 2022 | Mar. 17, 2022 | Mar. 14, 2022 | Mar. 03, 2022 | Nov. 17, 2021 | Apr. 13, 2021 | Dec. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Equity [Line Items] | |||||||||||||
Shares authorized | 1,000,000,000 | 1,000,000,000 | |||||||||||
Common stock, shares authorized | 750,000,000 | 750,000,000 | |||||||||||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | |||||||||||
Preferred stock, shares authorized | 250,000,000 | 250,000,000 | |||||||||||
Preferred stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | |||||||||||
Number of common shares issued and sold | 325,732 | 474,068 | 278,810 | 276,190 | 90,600 | 8,000,000 | 1,445,400 | ||||||
Sales price per share | $ 1.0745 | $ 1.0547 | $ 1.076 | $ 1.050 | $ 1.088 | $ 1.50 | |||||||
Average share price | $ 1.065 | $ 1.065 | |||||||||||
Net proceeds from issuance of common shares | $ 350,313 | $ 500,000 | $ 300,000 | $ 290,000 | $ 98,574 | $ 10,886,337 | $ 1,538,887 | ||||||
Authorized aggregate amount of common stock under shelf registration | $ 150,000,000 | 150,000,000 | |||||||||||
Legal costs and filing fees associated with filling of shelf registration statement | $ 84,926 | $ 84,926 | $ 84,926 | $ 84,926 | |||||||||
Maximum period to issue common shares | 36 months | ||||||||||||
Number of shares authorized to repurchase | 500,000 | 500,000 | |||||||||||
Maximum price per share under stock repurchase plan | $ 4.80 | ||||||||||||
Common stock, shares, outstanding | 16,052,617 | 17,439,947 | 17,439,947 | 16,052,617 | |||||||||
Dividend paid | $ 386,870 | $ 699,899 | $ 1,116,660 | $ 711,899 | |||||||||
Dividends paid per common share | $ 0.02 | $ 0.02 | $ 0.06 | $ 0.02 | |||||||||
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% | ||||||||||||
Noncontrolling Interest Operating Partnership | |||||||||||||
Equity [Line Items] | |||||||||||||
Common units outstanding | 16,266,148 | 17,653,478 | 17,653,478 | 16,266,148 | |||||||||
Dividend paid | $ 4,271 | $ 4,271 | $ 12,812 | $ 4,271 | |||||||||
General Partner | Noncontrolling Interest Operating Partnership | |||||||||||||
Equity [Line Items] | |||||||||||||
Common units outstanding | 16,052,617 | 17,439,947 | 17,439,947 | 16,052,617 | |||||||||
General Partner | Medalist Diversified Real Estate Investment Trust, Inc. ("REIT") | Noncontrolling Interest Operating Partnership | |||||||||||||
Equity [Line Items] | |||||||||||||
Common stock, shares, outstanding | 16,052,617 | 17,439,947 | 17,439,947 | 16,052,617 | |||||||||
Operating Partnership unit holders (distributions) | Noncontrolling Interest Operating Partnership | |||||||||||||
Equity [Line Items] | |||||||||||||
Number of stock issued for conversion to common shares | 213,531 | ||||||||||||
Common units eligible for conversion | 213,531 | 213,531 | 213,531 | ||||||||||
Operating Partnership unit holders (distributions) | Noncontrolling Limited Partner | Noncontrolling Interest Operating Partnership | |||||||||||||
Equity [Line Items] | |||||||||||||
Common units outstanding | 213,531 | 213,531 | 213,531 | 213,531 | |||||||||
Operating Partnership | General Partner | |||||||||||||
Equity [Line Items] | |||||||||||||
Operating Partnership ownership interest | 98.79% | 98.69% |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Percentage of total annualized base revenues of properties in the Mid-Atlantic | 100% |
Related Party Transactions - Me
Related Party Transactions - Medalist Fund Manager Inc (Details) - Medalist Fund Manager, Inc. - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 21 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Sep. 30, 2022 | Mar. 16, 2021 | |
Asset management fees | |||||||
Amounts payable to Manager | |||||||
Asset management fee percentage | 0.125% | ||||||
Asset management fees incurred | $ 221,265 | $ 216,295 | $ 653,668 | $ 602,588 | |||
Acquisition fees | |||||||
Amounts payable to Manager | |||||||
Percentage Of Acquisition Fee | 2% | ||||||
Threshold stock price up to which one half of acquisition fees will defer | $ 5 | $ 5 | $ 5 | ||||
Acquisition and closing costs | $ 351,810 | ||||||
Cash payment of acquisition fee | 175,905 | ||||||
Acquisition fee accrued | 175,905 | ||||||
Acquisition fees | Lancer Center Property | |||||||
Amounts payable to Manager | |||||||
Acquisition and closing costs | $ 206,052 | ||||||
Acquisition fees | Salisbury Marketplace Property | |||||||
Amounts payable to Manager | |||||||
Threshold stock price up to which one half of acquisition fees will defer | $ 5 | $ 5 | $ 5 | ||||
Acquisition and closing costs | $ 0 | $ 201,524 | |||||
Cash payment of acquisition fee | 100,762 | ||||||
Acquisition fee accrued | 0 | 100,762 | |||||
Acquisition fees | Greenbrier Business Center Property | |||||||
Amounts payable to Manager | |||||||
Threshold stock price up to which one half of acquisition fees will defer | $ 5 | $ 5 | |||||
Acquisition and closing costs | $ 145,758 | $ 145,758 | |||||
Cash payment of acquisition fee | 72,879 | 72,879 | |||||
Acquisition fee accrued | 72,879 | 72,879 | |||||
Acquisition fees | Properties acquired in 2021 | Accounts Payable and Accrued Liabilities | |||||||
Amounts payable to Manager | |||||||
Acquisition fee accrued | $ 251,955 | ||||||
Acquisition fees | Properties acquired in 2021 and 2022 | Accounts Payable and Accrued Liabilities | |||||||
Amounts payable to Manager | |||||||
Acquisition fee accrued | $ 352,717 | ||||||
Incentive fees | |||||||
Amounts payable to Manager | |||||||
Incentive fee expenses | $ 0 | $ 0 | $ 0 | $ 0 |
Related Party Transactions - Ot
Related Party Transactions - Other Related Parties (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
One of the Medalist Fund Manager, Inc. owners | Shockoe Properties, LLC | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage by noncontrolling owners | 6.32% | 6.32% | ||
Property management fees | Shockoe Properties, LLC | ||||
Related Party Transaction [Line Items] | ||||
Property management fees | $ 68,487 | $ 52,583 | $ 196,877 | $ 135,988 |
Percentage of rent | 3% | |||
Threshold limit of percentage of asset management fee | up to three percent of the monthly gross revenues |
Segment Information - Property
Segment Information - Property Operating Revenues, Expenses and NOI by Product Type (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 2,841,073 | $ 3,038,143 | $ 8,340,938 | $ 8,688,257 |
Operating expenses | 3,113,383 | 3,090,999 | 8,841,078 | 8,215,010 |
Bad debt expense | 22,818 | 12,946 | 26,014 | |
Net operating income | (881,313) | 71,785 | (1,278,818) | 597,888 |
Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2,841,073,000 | 3,038,143,000 | 8,340,938,000 | 8,688,257,000 |
Operating expenses | 1,270,920,000 | 1,436,289,000 | 3,197,946,000 | 4,009,441,000 |
Bad debt expense | 22,818,000 | 12,946,000 | 26,014,000 | |
Net operating income | 1,570,153,000 | 1,579,036,000 | 5,130,046,000 | 4,652,802,000 |
Operating segments | Hotel properties. | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 379,309,000 | 1,280,338,000 | 1,507,649,000 | 4,009,041,000 |
Operating expenses | 589,311,000 | 960,994,000 | 1,302,114,000 | 2,733,578,000 |
Net operating income | (210,002,000) | 319,344,000 | 205,535,000 | 1,275,463,000 |
Operating segments | Retail center properties | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,850,797,000 | 1,494,219,000 | 4,999,089,000 | 4,049,209,000 |
Operating expenses | 491,889,000 | 397,250,000 | 1,384,061,000 | 1,079,014,000 |
Bad debt expense | 22,140,000 | 7,954,000 | 25,336,000 | |
Net operating income | 1,358,908,000 | 1,074,829,000 | 3,607,074,000 | 2,944,859,000 |
Operating segments | Flex center property | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 610,967,000 | 263,586,000 | 1,834,200,000 | 630,007,000 |
Operating expenses | 189,720,000 | 78,045,000 | 511,771,000 | 196,849,000 |
Bad debt expense | 678,000 | 4,992,000 | 678,000 | |
Net operating income | $ 421,247,000 | $ 184,863,000 | $ 1,317,437,000 | $ 432,480,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - $ / shares | 3 Months Ended | 9 Months Ended | |||||||||||||
Oct. 20, 2022 | Jul. 21, 2022 | Apr. 21, 2022 | Jan. 20, 2022 | Oct. 27, 2021 | Jul. 26, 2021 | Apr. 30, 2021 | Feb. 01, 2021 | Oct. 26, 2020 | Jul. 24, 2020 | Apr. 27, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Subsequent Event [Line Items] | |||||||||||||||
Common stock dividend paid | $ 0.02 | $ 0.02 | $ 0.06 | $ 0.02 | |||||||||||
Dividends paid (in dollars per share) | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.37 | ||||
Subsequent event | Common Stock | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Common stock dividend paid | 0.01 | ||||||||||||||
Subsequent event | Mandatorily redeemable preferred stock. | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Dividends paid (in dollars per share) | $ 0.50 |