Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 10, 2023 | Jun. 30, 2022 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
ICFR Auditor Attestation Flag | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 13,796,676 | ||
Entity Common Stock, Shares Outstanding | 17,758,421 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001654595 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Auditor Name | Cherry Bekaert LLP | ||
Auditor Firm ID | 677 | ||
Auditor Location | Richmond, Virginia |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Investment properties, net | $ 76,514,952 | $ 69,407,915 |
Cash | 3,922,136 | 4,370,405 |
Restricted cash | 1,740,717 | 3,013,572 |
Rent and other receivables, net of allowance of $47,109 and $13,010, as of December 31, 2022 and December 31, 2021, respectively | 402,434 | 466,141 |
Assets held for sale | 9,846,208 | |
Unbilled rent | 1,022,153 | 872,322 |
Intangible assets, net | 3,748,706 | 4,200,392 |
Other assets | 564,306 | 370,133 |
Total Assets | 87,915,404 | 92,547,088 |
LIABILITIES | ||
Accounts payable and accrued liabilities | 1,198,072 | 1,307,257 |
Intangible liabilities, net | 2,234,113 | 1,880,612 |
Mortgages payable, net | 61,340,259 | 54,517,822 |
Mortgages payable, net, associated with assets held for sale | 7,615,368 | |
Mandatorily redeemable preferred stock, net | 4,450,521 | 4,227,640 |
Total Liabilities | 69,222,965 | 69,548,699 |
EQUITY | ||
Common stock, 17,758,421 and 16,052,617 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 177,584 | 160,526 |
Additional paid-in capital | 51,363,812 | 49,645,426 |
Offering costs | (3,350,946) | (3,350,946) |
Accumulated deficit | (30,939,020) | (24,981,346) |
Total Stockholders' Equity | 17,251,430 | 21,473,660 |
Noncontrolling interests - Operating Partnership | 842,898 | 877,917 |
Total Equity | 18,692,439 | 22,998,389 |
Total Liabilities and Equity | 87,915,404 | 92,547,088 |
Hanover Square Property | ||
EQUITY | ||
Noncontrolling interests | 127,426 | 146,603 |
Parkway Property | ||
EQUITY | ||
Noncontrolling interests | $ 470,685 | $ 500,209 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Consolidated Balance Sheets | ||
Allowance for uncollectible receivables | $ 47,109 | $ 13,010 |
Common stock, shares, issued | 17,758,421 | 16,052,617 |
Common stock, shares, outstanding | 17,758,421 | 16,052,617 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
REVENUE | ||
Total Revenue | $ 11,091,325 | $ 11,472,549 |
OPERATING EXPENSES | ||
Retail center property operating expenses | 1,912,110 | 1,518,973 |
Flex center property operating expenses | 684,843 | 343,717 |
Hotel property operating expenses | 1,335,801 | 3,102,951 |
Bad debt expense | 46,932 | 39,024 |
Share based compensation expenses | 483,100 | 149,981 |
Legal, accounting and other professional fees | 1,627,881 | 1,465,199 |
Corporate general and administrative expenses | 457,653 | 654,137 |
Loss on impairment | 36,670 | |
Impairment of assets held for sale | 175,671 | 0 |
Other expense | 227,164 | |
Depreciation and amortization | 4,706,823 | 3,508,704 |
Total Operating Expenses | 11,694,648 | 10,782,686 |
(Loss) gain on disposal of investment properties | (421,096) | 124,641 |
Loss on extinguishment of debt | 389,207 | |
Operating (loss) income | (1,413,626) | 814,504 |
Interest expense | 3,555,088 | 5,534,255 |
Net Loss from Operations | (4,968,714) | (4,719,751) |
Other income | 236,500 | 361,469 |
Net Loss | (4,732,214) | (4,358,282) |
Less: Net (loss) income attributable to Operating Partnership noncontrolling interest | (20,072) | 3,903 |
Net Loss Attributable to Medalist Common Shareholders | $ (4,769,241) | $ (4,364,264) |
Loss per share from operations - basic | $ (0.28) | $ (0.33) |
Loss per share from operations - diluted | $ (0.28) | $ (0.33) |
Weighted-average number of shares - basic | 17,122,617 | 13,092,937 |
Weighted-average number of shares - diluted | 17,122,617 | 13,092,937 |
Dividends paid per common share | $ 0.07 | $ 0.04 |
Hampton Inn Property | ||
OPERATING EXPENSES | ||
Interest expense | $ 475,844 | |
Less: Net income (loss) attributable to noncontrolling interests | 14,651 | |
Hanover Square Property | ||
OPERATING EXPENSES | ||
Interest expense | $ 439,188 | 451,833 |
Less: Net income (loss) attributable to noncontrolling interests | 38,023 | (8,781) |
Parkway Property | ||
OPERATING EXPENSES | ||
Less: Net income (loss) attributable to noncontrolling interests | 19,076 | (3,791) |
Retail center property revenues | ||
REVENUE | ||
Total Revenue | 7,053,757 | 5,634,396 |
Flex center property revenues | ||
REVENUE | ||
Total Revenue | 2,529,919 | 1,202,822 |
Hotel property room revenues | ||
REVENUE | ||
Total Revenue | 1,494,836 | 4,590,372 |
Hotel property other revenues | ||
REVENUE | ||
Total Revenue | $ 12,813 | $ 44,959 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' 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 | |||||||||
Share based compensation | $ 673 | 149,308 | 149,981 | 149,981 | ||||||
Share based compensation (shares) | 67,256 | |||||||||
Convertible debenture beneficial conversion feature | 284,052 | 284,052 | 284,052 | |||||||
Conversion of convertible debentures | $ 31,819 | 5,026,969 | 5,058,788 | 5,058,788 | ||||||
Conversion of convertible debentures (in shares) | 3,181,916 | |||||||||
Offering costs | (358,589) | (358,589) | (358,589) | |||||||
Net (loss) income | (4,364,264) | (4,364,264) | 14,651 | (8,781) | $ (3,791) | 3,903 | (4,358,282) | |||
Dividends and distributions | (642,105) | (642,105) | (466,258) | (34,400) | (8,541) | (1,151,304) | ||||
Non-controlling interests | 504,000 | 504,000 | ||||||||
Reallocation of noncontrolling interest retained earnings | (675,990) | (675,990) | $ 675,990 | |||||||
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 | $ 5,285 | 477,815 | 483,100 | 483,100 | ||||||
Share based compensation (shares) | 528,474 | |||||||||
Net (loss) income | (4,769,241) | (4,769,241) | 38,023 | 19,076 | (20,072) | (4,732,214) | ||||
Dividends and distributions | (1,188,433) | (1,188,433) | (57,200) | (48,600) | (14,947) | (1,309,180) | ||||
Balance at Dec. 31, 2022 | $ 177,584 | $ 51,363,812 | $ (3,350,946) | $ (30,939,020) | $ 17,251,430 | $ 127,426 | $ 470,685 | $ 842,898 | $ 18,692,439 | |
Balance (shares) at Dec. 31, 2022 | 17,758,421 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (4,732,214) | $ (4,358,282) |
Adjustments to reconcile consolidated net loss to net cash flows from operating activities | ||
Depreciation | 3,381,249 | 2,415,139 |
Amortization | 1,325,574 | 1,093,565 |
Loan cost amortization | 107,595 | 103,180 |
Mandatorily redeemable preferred stock issuance cost and discount amortization | 222,881 | 204,383 |
Convertible debenture issuance cost, discount and beneficial conversion feature amortization | 1,718,487 | |
Above (below) market lease amortization, net | (226,721) | (24,024) |
Bad debt expense | 46,932 | 39,024 |
Note payable forgiveness | (176,300) | |
Share-based compensation | 483,100 | 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 | 421,096 | (124,641) |
Changes in assets and liabilities | ||
Rent and other receivables, net | 16,775 | (46,413) |
Unbilled rent | (149,831) | (198,594) |
Other assets | (194,173) | (50,243) |
Accounts payable and accrued liabilities | (109,185) | 87,351 |
Net cash flows from operating activities | 1,194,626 | 832,613 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Investment property acquisitions | (10,279,714) | (20,750,571) |
Capital expenditures | (1,019,304) | (536,685) |
Cash received from disposal of investment properties | 1,979,837 | 2,144,529 |
Net cash flows from investing activities | (9,319,181) | (19,142,727) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Dividends and distributions paid | (1,309,180) | (1,151,304) |
Investment of noncontrolling interests | 504,000 | |
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 | 24,377,886 |
Repayment of mortgages payable | (11,932,137) | (14,914,830) |
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 | 10,801,411 |
Repurchases of common stock, including costs and fees | (286,543) | |
Net cash flows from financing activities | 6,403,431 | 20,597,163 |
(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (1,721,124) | 2,287,049 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 7,383,977 | 5,096,928 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | $ 5,662,853 | $ 7,383,977 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows - Supplemental cash flow information - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Additional Cash Flow Elements and Supplemental Disclosures and Non-Cash Activities | ||
CASH AND CASH EQUIVALENTS, end of period, shown in consolidated balance sheets | $ 3,922,136 | $ 4,370,405 |
RESTRICTED CASH including assets restricted for capital and operating reserves and tenant deposits, end of period, shown in consolidated balance sheets | 1,740,717 | 3,013,572 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period shown in the consolidated statements of cash flows | 5,662,853 | 7,383,977 |
Other cash transactions: | ||
Interest paid | 3,237,728 | 4,065,121 |
Non-cash transactions: | ||
Release of restricted cash related to sale of Clemson Best Western Property | $ 1,455,777 | |
Conversion of convertible debentures and accrued interest to common stock | 5,058,788 | |
Transfer of investment properties, net to assets held for sale, net | 9,683,555 | |
Transfer of mortgages payable, net to mortgages payable associated with assets held for sale, net | 7,592,931 | |
Assumption of mortgage debt, net | 4,481,600 | |
Forgiveness of note payable | $ 176,300 |
Organization and Basis of Prese
Organization and Basis of Presentation and Consolidation | 12 Months Ended |
Dec. 31, 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 December 31, 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”), Brookfield Center, a 64,880 square foot mixed-use industrial/office property located in Greenville, South Carolina (the “Brookfield Center Property”), the Lancer Center, a 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% of the Hanover Square Property as a tenant in common with a noncontrolling owner which owns the remaining 16% interest and 82% of the Parkway Property as a tenant in common with a noncontrolling owner which owns the remaining 18% interest. The use of the word “Company” refers to the REIT and its consolidated subsidiaries, except where the context otherwise requires. The Company includes the REIT, the Operating Partnership, wholly owned limited liability corporations which own or operate the properties, 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 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 consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). References to the consolidated financial statements and references to individual financial statements included herein, reference the consolidated financial statements or the respective individual financial statement. All material balances and transactions between the consolidated entities of the Company have been eliminated. The Company was formed to acquire, reposition, renovate, lease and manage income-producing properties, with a primary focus on (i) commercial properties, including flex-industrial, limited-service hotels, and retail properties, and (ii) multi-family residential properties in secondary and tertiary markets in the southeastern part of the United States, with an expected concentration in Virginia, North Carolina, South Carolina, Georgia, Florida and Alabama. The Company may also pursue, in an opportunistic manner, other real estate-related investments, including, among other things, equity or other ownership interests in entities that are the direct or indirect owners of real property, indirect investments in real property, such as those that may be obtained in a joint venture. While these types of investments are not intended to be a primary focus, the Company may make such investments in the discretion of Medalist Fund Manager, Inc. (the “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 | 12 Months Ended |
Dec. 31, 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 4 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 and the impairment of assets held for sale described below, the Company did not record any impairment adjustments to its investment properties resulting from events or changes in circumstances during the years ended December 31, 2022 and 2021, that would result in the projected value being below the carrying value of the Company’s properties. During the year ended December 31, 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 these properties should be written off. As a result, the Company recorded a loss on impairment of $36,670 for the year ended December 31, 2022. No such tenant-related loss on impairment was recorded during the year ended December 31, 2021. Assets Held for Sale The Company may decide to sell properties that are held as investment properties. The 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 was initially classified as held for sale, the Company 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 consolidated statement of operations for the year ended December 31, 2022. No such impairment of assets held for sale was recorded during the year ended December 31, 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 year ended December 31, 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 Details of the deferred costs, net of amortization, arising from the Company’s purchases of its retail center properties and flex center properties are as follows: December 31, 2022 2021 Intangible assets, net Leasing commissions $ 1,135,421 $ 1,153,736 Legal and marketing costs 169,437 163,019 Above market leases 209,860 360,509 Net leasehold asset 2,233,988 2,523,128 $ 3,748,706 $ 4,200,392 Intangible liabilities, net Below market leases $ (2,234,113) $ (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 year ended December 31, 2022 and 2021, respectively, were as follows: For the year ended December 31, 2022 2021 Amortization of above market leases $ (188,903) $ (250,504) Amortization of below market leases 415,624 274,528 $ 226,721 $ 24,024 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 years ended December 31, 2022 and 2021, respectively, were as follows: For the year ended December 31, 2022 2021 Leasing commissions $ (246,294) $ (208,650) Legal and marketing costs (65,760) (37,441) Net leasehold asset (1,013,520) (847,474) $ (1,325,574) $ (1,093,565) As of December 31, 2022 and 2021, the Company’s accumulated amortization of lease origination costs, leases in place and legal and marketing costs totaled $2,198,049 and $2,779,370, respectively. During the years ended December 31, 2022 and 2021, the Company wrote off $1,901,786 and $667,298, respectively, in accumulated amortization related to fully amortized intangible assets and $5,109 and $0, 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: 2023 2024 2025 2026 2027 2028-2042 Total Intangible Assets Leasing commissions $ 219,221 $ 173,352 $ 145,550 $ 107,312 $ 88,394 $ 401,592 $ 1,135,421 Legal and marketing costs 61,506 39,837 24,004 13,160 7,917 23,013 169,437 Above market leases 97,960 45,608 21,526 15,629 14,543 14,594 209,860 Net leasehold asset 623,930 400,511 295,851 199,466 153,142 561,088 2,233,988 $ 1,002,617 $ 659,308 $ 486,931 $ 335,567 $ 263,996 $ 1,000,287 $ 3,748,706 Intangible Liabilities Below market leases, net $ (368,802) $ (285,892) $ (213,348) $ (178,776) $ (161,866) $ (1,025,429) $ (2,234,113) 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 years ended December 31, 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 December 31, 2022, the Company held two cash accounts at a single financial institution with combined balances that exceeded the FDIC limit by $2,613,789. 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 December 31, 2022 and 2021, the Company reported $267,854 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 December 31, 2022 and 2021, the Company reported $579,785 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 December 31, 2022 and 2021, the Company reported $893,078 and $1,267,470, respectively, in capital property reserves. December 31, Property and Purpose of Reserve 2022 2021 Clemson Best Western Property - improvements — 50,012 Clemson Best Western Property - furniture, fixtures and equipment — 275,109 Franklin Square Property - leasing costs 845,765 700,000 Brookfield Center Property - maintenance and leasing cost reserve 47,313 92,349 Greenbrier Business Center - capital reserve — 150,000 Total $ 893,078 $ 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 consolidated balance sheets. During the year ended December 31, 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 consolidated balance sheet. No such amounts were recorded during the year ended December 31, 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 consolidated balance sheets. As of December 31, 2022 and 2021, the Company reported $1,022,153 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 consolidated statements of operations under the captions "Retail center property revenues” and “Flex center property 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. During the years ended December 31, 2022 and 2021, respectively, the Company recognized $311,116 and $113,493, in retail center and flex center property tenant reimbursement revenues resulting from differences between the final billed amounts and previously estimated recoveries. The Company includes these tenant reimbursement revenues on the consolidated statements of operations under the captions "Retail center property revenues” and “Flex center property revenues.” 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 year ended December 31, 2022 no such termination fees were recorded. During the year ended December 31, 2021, the Company received a $200,000 lease termination fee from a tenant in the Company’s Franklin Square Property. The Company recorded this revenue as other income on the Company’s consolidated statements of operation for the year ended December 31, 2021. Upon early lease termination, any unrecovered intangibles and other assets are written off as a loss on impairment. All unrecovered intangibles and other assets associated with the tenant in the Company’s Franklin Square Property which terminated its lease had been fully depreciated or amortized prior to the termination. Accordingly, during the years ended December 31, 2022 and 2021, respectively, no loss on impairment related to the Franklin Square tenant was recognized. However, during the year ended December 31, 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 consolidated statement of operations for the year ended December 31, 2022. No such loss on impairment was recorded for the year ended December 31, 2021. Hotel Property Revenues Hotel revenues from the Clemson Best Western Property (and for prior year periods, the Hampton Inn Property) were 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 were 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 and the Company sold the Clemson Best Western Property on September 29, 2022. The Clemson Best Western Property (and for prior year periods, the Hampton Inn Property) was 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 had a legal obligation to act as a collection agent. The Clemson Best Western Property did not retain these taxes and fees; therefore, they were not included in revenues. The Clemson Best Western Property recorded a liability when the amounts were collected and relieved the liability when payments were 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) were 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 reimbursed 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 years ended December 31, 2022 and 2021 were $478,774 and $468,897 , respectively $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 December 31, 2022 and 2021, the Company’s allowance for uncollectible rent totaled $47,109 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 December 31, 2022 and 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 year ended December 31, 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 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 consolidated balance sheets but separate from the Company’s equity. On the consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. The Company’s consolidated statements of changes in stockholders’ equity includes beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity. The first noncontrolling interest is in the Hampton Inn Property, 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 year ended December 31, 2021, 22% of the Hampton Inn’s net income of $66,595 , or The second noncontrolling interest is in the Hanover Square Property in which the Company owns an 84% tenancy in common interest through its subsidiary and an outside party owns a 16% tenancy in common interest. The Hanover Square Property’s net income (loss) is allocated to the noncontrolling ownership interest based on its 16% ownership. During the year ended December 31, 2022, 16% of the Hanover Square Property’s net income of $237,651 or $38,023 $54,888 $8,781 The third noncontrolling interest is in the Parkway Property in which the Company owns an 82% tenancy in common interest through its subsidiary and an outside party owns an 18% tenancy in common interest. The Parkway Property's net income (loss) is allocated to the noncontrolling ownership interest based on its 18% ownership. During the year ended December 31, 2022, 18% of the Parkway Property's net income of $105,972 $19,076 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% of the noncontrolling owner’s tenant in common interest in the Hampton Inn Property. On August 31, 2020, a unitholder converted 5,319 Operating Partnership units into shares of Common Stock. As of December 31, 2022, respectively, there were 213,531 Operating Partnership units outstanding. The Operating Partnership units not held by the REIT represent 1.19% and 1.31% of the outstanding Operating Partnership units as of the year ended December 31, 2022 and 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 year ended December 31, 2022, a weighted average of 1.22 % of the Operating Partnership’s net loss of $1,651,829 , or $20,072 , was allocated to the noncontrolling unit holders. During the year ended December 31, 2021, a weighted average of 1.82 % of the Operating Partnership’s net income of $214,333 , or $3,903 , was allocated to the noncontrolling unit holders. Recent Accounting Pronouncements Since its initial public offering, the Company has elected to be classified as an Emerging Growth Company in its periodic reporting to the Securities and Exchange Commission, and accordingly has followed the private company implementation dates for new accounting pronouncements. Effective for the three months ending March 31, 2023, the Company will no longer be classified as an Emerging Growth Company, but will retain its classification as a smaller reporting company and therefore follow implementation dates applicable to smaller reporting companies with respect to new accounting pronouncements. Recently Adopted Accounting Pronouncements Accounting for Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) Leases 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 reve |
Investment Properties
Investment Properties | 12 Months Ended |
Dec. 31, 2022 | |
Investment Properties | |
Investment Properties | 3. Investment Properties Investment properties consist of the following: December 31, 2022 2021 Land $ 16,526,436 $ 14,142,555 Site improvements 4,719,926 4,431,338 Buildings and improvements (1) 64,669,498 57,322,242 Investment properties at cost (2) 85,915,860 75,896,135 Less accumulated depreciation 9,400,908 6,488,220 Investment properties, net $ 76,514,952 $ 69,407,915 (1) Includes tenant improvements (both those acquired as part of the acquisition of the properties and those constructed after the properties’ 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 $3,381,249 and $2,415,139 for years ended December 31, 2022 and 2021, respectively Capitalized tenant improvements The Company carries two categories of capitalized tenant improvements on its consolidated balance sheets, both of which are recorded under investment properties, net, on the Company’s consolidated balance sheets. The first category is the allocation of acquisition costs to tenant improvements that is recorded on the Company’s consolidated balance sheet as of the date of the Company’s acquisition of the investment property. The second category are tenant improvement costs incurred and paid by the Company subsequent to the acquisition of the investment property. Both are recorded as a component of investment properties on the Company’s consolidated balance sheets. Depreciation expense on both categories of tenant improvements is recorded as a component of depreciation expense on the Company’s consolidated statement of operations. The Company generally records depreciation of capitalized tenant improvements on a straight-line basis over the terms of the related leases. Details of these deferred costs, net of depreciation are as follows: December 31, 2022 2021 Capitalized tenant improvements – acquisition cost allocation, net $ 3,178,534 $ 1,840,612 Capitalized tenant improvements incurred subsequent to acquisition, net 338,836 257,340 During the years ended December 31, 2022 and 2021, the Company recorded $177,373 and $143,079, respectively, in capitalized tenant improvements. Depreciation of capitalized tenant improvements incurred subsequent to acquisition was $95,877 and $65,658 for the years ended December 31, 2022 and 2021, respectively. Depreciation of capitalized tenant improvements arising from the acquisition cost allocation was $622,827 and $371,714 for the years ended December 31, 2022 and 2021, respectively. Capitalized leasing commissions The Company carries two categories of capitalized leasing commissions on its consolidated balance sheets. The first category is the allocation of acquisition costs to leasing commissions that is recorded as an intangible asset (see Note 2, above, for a discussion of the Company’s accounting treatment for intangible assets) on the Company’s consolidated balance sheet as of the date of the Company’s acquisition of the investment property. The second category is leasing commissions incurred and paid by the Company subsequent to the acquisition of the investment property. These costs are carried on the Company’s consolidated balance sheets under investment properties. The Company generally records depreciation of capitalized leasing commissions on a straight-line basis over the terms of the related leases. Details of these deferred costs, net of depreciation are as follows: December 31, 2022 2021 Capitalized leasing commissions, net $ 555,956 $ 356,327 During the years ended December 31, 2022 and 2021, the Company recorded $300,331 and $73,458, respectively in capitalized leasing commissions. Depreciation on capitalized leasing commissions was $100,702 and $65,414 for the years ended December 31, 2022 and 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 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 December 31, 2022 and 2021, assets held for sale and liabilities associated with assets held for sale consisted of the following: December 31, 2022 2021 Investment properties, net $ — $ 9,846,208 Total assets held for sale $ — $ 9,846,208 December 31, 2022 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. As part of its continuing evaluation of the amounts previously used for the estimated fair value of the Clemson Best Western asset group that had been reclassified as assets held for sale, during the three months ended March 31, 2022, the Company recorded an impairment charge of $175,671 associated with this reclassification. 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 $421,096 reported on the Company's consolidated statement of operations for the year ended December 31, 2022. This loss, which exceeded the Company’s previously recorded loss on impairment, was related to costs associated with the sale of the property. On August 31, 2021, the Company sold the Hampton Inn Property to an unrelated third party for a sale price of $12.9 million, resulting in a gain on sale of investment properties of $124,641 reported on the Company's consolidated statement of operations for the year ended December 31, 2021. The Company reports properties that have been either previously disposed or that are currently held for sale in continuing operations in the Company's consolidated statements of operations if the disposition, or anticipated disposition, of the assets does not represent a shift in the Company's investment strategy. The Company's sale of the 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, which was sold on September 29, 2022 and the Hampton Inn Property, which was sold on August 31, 2021, which are included in continuing operations, are as follows: For the year ended December 31, 2022 2021 Hotel property room revenues $ 1,494,836 $ 4,590,372 Hotel property other revenues 12,813 44,959 Total Revenue 1,507,649 4,635,331 Hotel property operating expenses 1,335,801 3,102,951 Depreciation and amortization — — Total Operating Expenses 1,335,801 3,102,951 (Loss) gain on disposal of investment properties (421,096) 124,641 Operating (Loss) Income (249,248) 1,657,021 Interest expense 427,244 1,066,790 Net (Loss) Income from Operations (676,492) 590,231 Other expense (48) (166) Net (Loss) Income (676,540) 590,065 Net income attributable to Hampton Inn Property noncontrolling interests — 14,651 Net (loss) income attributable to Operating Partnership noncontrolling interests (12,827) 13,898 Net Loss (Income) Attributable to Medalist Common Shareholders (663,713) 561,516 2022 Property Acquisitions On June 13, 2022, the Company completed its acquisition of the Salisbury Marketplace Property, a 79,732 square foot retail property located in Salisbury, North Carolina, through a wholly owned subsidiary. The Salisbury Marketplace Property, built in 1986, was 91.2% leased as of December 31, 2022, and is anchored by Food Lion, Citi Trends and Family Dollar. The purchase price for the Salisbury Marketplace Property was $10,025,000 paid through a combination of cash provided by the Company and the incurrence of new mortgage debt. The Company’s total investment was $10,279,714. The Company incurred $254,714 of acquisition and closing costs which were capitalized and added to the tangible assets acquired. 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 181,590 square foot retail property located in Lancaster, South Carolina, through a wholly owned subsidiary. The Lancer Center Property, built in 1987, was 100 % leased as of December 31, 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 79.9% leased as of December 31, 2022. A major tenant is Bridge Church. The purchase price for the Greenbrier Business Center Property was $7,250,000, paid through a combination of cash provided by the Company and the assumption of mortgage debt. The Company's total investment, including $13,400 of loan issuance costs, was $7,578,762. The Company incurred $178,763 of acquisition and closing costs which were capitalized and added to the tangible assets acquired. The Parkway Property On November 1, 2021, the Company completed its acquisition of an undivided 82% tenant-in-common interest in the Parkway Property, a 64,109 square foot mixed-use industrial/office property, through a wholly owned subsidiary. The Parkway Property, built in 1984, was 100% leased as of December 31, 2022, and is anchored by First Onsite and GBRS Group. The purchase price for the Parkway Property was $7,300,000, paid through a combination of $2,138,795 in cash provided by the Company, $469,492 in cash from an unaffiliated tenant-in-common, and net mortgage loan proceeds of approximately $4,989,737. The Company’s total investment, including $110,263 of loan issuance costs, was $7,598,024. The Company incurred $298,024 of acquisition and closing costs which were capitalized and added to the tangible assets acquired. The Company purchased the Parkway Property as a tenant-in-common with PMI Parkway, LLC, an unaffiliated party. The Company acquired an 82% interest in the Parkway Property, and PMI Parkway, LLC owns the remaining 18% interest. Lancer Greenbrier Center Business Center Parkway Property Property Property Total Fair value of assets acquired: Investment property (a) $ 9,902,876 $ 6,896,803 $ 7,277,036 $ 24,076,715 Lease intangibles and other assets (b) 1,023,753 583,940 472,288 2,079,981 Restricted cash acquired (c) — 150,000 — 150,000 Above market leases (b) 157,438 48,186 2,494 208,118 Below market leases (b) (878,682) (100,167) (153,794) (1,132,643) Fair value of net assets acquired (d) $ 10,205,385 $ 7,578,762 7,598,024 $ 25,382,171 Purchase consideration: Consideration paid with cash (e) $ 3,783,515 $ 3,097,162 2,138,795 $ 9,019,472 Consideration paid by noncontrolling owner — — 469,492 469,492 Consideration paid with new mortgage debt, net (f) 6,421,870 — 4,989,737 11,411,607 Consideration paid with assumed mortgage debt, net (g) — 4,481,600 — 4,481,600 Total consideration (h) $ 10,205,385 $ 7,578,762 7,598,024 $ 25,382,171 a. Represents the fair value of the investment property acquired which includes land, buildings, site improvements, tenant improvements and furniture, fixtures and equipment. The fair value was determined using the market approach, the cost approach, the income approach or a combination thereof. Closing and acquisition costs were allocated and added to the fair value of the tangible assets acquired. b. Represents the fair value of lease intangibles and other assets. Lease intangibles include leasing commissions, leases in place, above market leases, below market leases and legal and marketing costs associated with replacing existing leases. c. Represents an operating reserve funded by the Company at closing. d. Represents the total fair value of assets and liabilities acquired at closing. e. Represents cash paid at closing and cash paid for acquisition (including intangible assets), and closing costs paid at closing or directly by the Company outside of closing. f. 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 | 12 Months Ended |
Dec. 31, 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 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 Board 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 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 % 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 January 27, 2023 January 24, 2023 0.50 October 20, 2022 - January 19, 2023 As of December 31, 2022 and 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 consolidated balance sheets. The mandatorily redeemable preferred stock was issued at $23.00 per share, a $2.00 per share discount. The total discount of $400,000 is being amortized over the five-year life of the shares using the effective interest method. Additionally, the Company incurred $739,118 in legal, accounting, other professional fees and underwriting discounts related to this offering. These costs were recorded as deferred financing costs on the accompanying consolidated balance sheets as a direct deduction from the carrying amount of the mandatorily redeemable preferred stock liability and are being amortized using the effective interest method over the term of the agreement. Amortization of the discount and deferred financing costs related to the mandatorily redeemable preferred stock totaling $222,881 and $204,383 were included in interest expense for the years ended December 31, 2022 and 2021, respectively, in the accompany ing consolidated statements of operations. Accumulated amortization of the discount and deferred financing costs was $589,639 and $366,758 as of December 31, 2022 and 2021, respectively. |
Loans Payable
Loans Payable | 12 Months Ended |
Dec. 31, 2022 | |
Loans Payable | |
Loans Payable | 5. Loans Payable Mortgages Payable The Company’s mortgages payables, net consists of the following: Monthly Interest December 31, Property Payment Rate Maturity 2022 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 9,877,867 10,134,667 Ashley Plaza (c) $ 52,795 3.75 % September 2029 10,930,370 11,127,111 Brookfield Center (d) $ 22,876 3.90 % November 2029 4,663,206 4,758,344 Parkway Center (e) $ 19,720 Variable October 2026 4,992,427 5,090,210 Wells Fargo Facility (f) $ 103,438 4.50 % June 2027 18,351,981 — Lancer Center (g) — 6,488,034 Greenbrier Business Center (h) — 4,495,000 Unamortized issuance costs, net (725,592) (825,544) Total mortgages payable, net $ 61,340,259 $ 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 % 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 thirty-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 December 31, 2022 and 2021, the Company believes that it is compliant with these covenants. (b) The mortgage loan for the Hanover Square Property bore interest at a fixed rate of 4.25 % until January 1, 2023, when the interest rate adjusted to a fixed rate of 6.94 %, which was determined by adding 3.00% 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 %. As a result of the interest rate change, as of February 1, 2023, the fixed monthly payment of $56,882 increased to $78,098 which includes interest at the fixed rate, and principal, based on a twenty-five-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 %. As of December 31, 2022 and 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 % and was interest only for the first twelve months. Beginning on October 1, 2020, the monthly payment became $52,795 for the remaining term of the loan, which includes interest at the fixed rate, and principal, based on a thirty-year amortization schedule. (d) The mortgage loan for the Brookfield Property bears interest at a fixed rate of 3.90 % and was interest only for the first twelve months. Beginning on November 1, 2020, the monthly payment became $22,876 for the remaining term of the loan, which includes interest at the fixed rate, and principal, based on a thirty-year amortization schedule. (e) The mortgage loan for the Parkway Property bears interest at a variable rate based on LIBOR with a minimum rate of 2.25 %. The interest rate payable is the ICE LIBOR rate plus 225 basis points. As of December 31, 2022 and 2021, the rate in effect for the Parkway Property mortgage was 6.3701 % and 2.3493 %, 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 thirty-year amortization schedule. On October 28, 2021, the Company entered into an Interest Rate Protection Transaction to limit its 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% if USD 1-Month ICE LIBOR exceeds 3%. For the period from September 1, 2022 through December 31, 2022, the effective rate for the Parkway Property mortgage exceeded the 5.25% cap, and payments from the Interest Rate Protection Transaction resulted in a net interest expense based on the 5.25% cap rate. Payments to the Company from the Interest Rate Protection Transaction are recorded as an offset to interest expense on the Company’s consolidated statements of operations for the year ended December 31, 2022. No such payments were received during the year ended December 31, 2021 because the interest rate in effect did not exceed the interest rate cap. (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 % for a five-year term. The monthly payment, which includes interest at the fixed rate, and principal, based on a twenty-five-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 % 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 December 31, 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 year ended December 31, 2022, recorded a loss on extinguishment of debt of $113,282 . The original mortgage loan for the Lancer Center Property bore interest at a fixed rate of 4.00 %. 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 year ended December 31, 2022, recorded a loss on extinguishment of debt of $56,393 . 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 % 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% if USD 1-Month ICE LIBOR exceeds 3%. USD 1-Month ICE LIBOR was 4.392% and 0.102% as of December 31, 2022 and 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. The Fair Value of the Interest Rate Protection Transaction is valued by an independent, third-party consultant which uses observable inputs such as yield curves, volatilities and other current market data, all of which are considered Level 2 inputs. As of December 31, 2022 and 2021, the fair value of the interest Rate Protection Transaction was $258,279 and $37,350, respectively. The Company reports changes in the fair value of the derivative as an increase (decrease) 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: Monthly Interest December 31, Property Payment Rate Maturity 2022 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 % . The interest rate payable was the USD LIBOR one-month rate plus 4.9 %. As of December 31, 2021, the rate in effect for the Clemson Best Western Property mortgage was 7.15 %. 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 year ended December 31, 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 year ended December 31, 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 consolidated statement of operations for the year ended December 31, 2022. No such expenses were recorded during the year ended December 31, 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% discount to the principal amount, accrue interest at a rate of 5% 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% issue discount totaled $250,000 and was amortized over the one-year term of the debentures using the effective interest method. The Company also paid a total of $518,517 in issuance costs, including legal, accounting, other professional fees, and underwriting discounts. In addition to the closing costs paid in cash, the Company paid $123,000 in debt issuance costs in common shares of the Company. These issuance costs were recorded as deferred debt issuance costs on the accompanying consolidated balance sheets as a direct deduction from the carrying amount of the convertible debentures and were amortized over the one-year term of the debentures using the effective interest method. Based on the terms and relevant conversion details, the debt component and embedded conversion option of the debentures are not bifurcated for accounting purposes under ASC 815, Derivative Instruments and Hedging Activities Debt Each tranche of the convertible debentures had a maturity date one year from its closing date. At its option, the holder at any time may elect to convert any portion of the principal and accrued interest into shares of the Company’s common stock. Conversions into common stock occur at the lower of (1) a fixed conversion price of $2.47, or (2) a variable conversion price equal to 88% 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 year ended December 31, 2022 Amortization Interest rate Mortgage of discounts and protection Other Interest capitalized transaction interest Expense issuance costs payments expense Total Franklin Square mortgage $ 511,568 $ 28,372 $ — $ — $ 539,940 Hanover Square mortgage 426,298 12,890 — — 439,188 Ashley Plaza mortgage 419,301 17,430 — — 436,731 Clemson Best Western mortgage 425,109 — — 2,135 427,244 Brookfield Center mortgage 186,270 11,350 — — 197,620 Lancer Center mortgage 115,179 11,928 — — 127,107 Greenbrier Business Center mortgage 81,409 1,155 — — 82,564 Parkway Center mortgage 198,480 11,026 (7,682) — 201,824 Wells Fargo Mortgage Facility 466,545 13,444 — — 479,989 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 222,881 — 400,000 622,881 Total interest expense $ 2,830,159 $ 330,476 $ (7,682) $ 402,135 $ 3,555,088 For the year ended December 31, 2021 Amortization Mortgage of discounts and Other Interest capitalized interest Expense issuance costs expense Total Franklin Square mortgage $ 720,003 $ 9,325 $ — $ 729,328 Hanover Square mortgage 438,931 12,902 — 451,833 Hampton Inn mortgage 456,300 9,000 10,544 475,844 Ashley Plaza mortgage 427,280 17,431 — 444,711 Clemson Best Western mortgage 561,821 22,437 6,688 590,946 Brookfield Center mortgage 189,685 11,352 — 201,037 Lancer Center mortgage 166,026 17,971 — 183,997 Greenbrier Business Center mortgage 63,429 924 — 64,353 Parkway Center mortgage 19,895 1,838 — 21,733 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 204,383 400,000 604,383 Amortization and interest on convertible debentures — 1,718,487 42,486 1,760,973 Other interest — — 5,117 5,117 Total interest expense $ 3,043,370 $ 2,026,050 $ 464,835 $ 5,534,255 Interest accrued and accumulated amortization of capitalized issuance costs consist of the following: As of December 31, 2022 As of December 31, 2021 Accumulated Accumulated amortization of amortization Accrued capitalized Accrued of capitalized interest issuance costs interest issuance costs Franklin Square mortgage $ 43,448 $ 30,736 $ — $ 2,364 Hanover Square mortgage 38,792 59,880 38,287 46,990 Ashley Plaza mortgage 35,296 58,109 — 40,679 Clemson Best Western mortgage — — 47,716 134,622 Brookfield Center mortgage — 36,893 15,979 25,542 Lancer Center mortgage — — 22,042 17,971 Greenbrier Business Center mortgage — — 15,482 924 Parkway Center mortgage 26,502 12,864 9,966 1,838 Wells Fargo Mortgage Facility — 13,444 — — Amortization and accrued preferred stock dividends (1) on mandatorily redeemable preferred stock 70,004 589,639 70,004 366,758 Total $ 214,042 $ 801,565 $ 219,476 $ 637,688 (1) Recorded as accrued interest under accounts payable and accrued liabilities on the Company’s consolidated balance sheets as of December 31, 2022 and 2021, respectively. Debt Maturity The Company’s scheduled principal repayments on indebtedness as of December 31, 2022 are as follows: 2023 $ 1,128,774 2024 1,165,548 2025 1,466,596 2026 1,539,696 2027 26,064,473 Thereafter 30,700,764 Total principal payments and debt maturities 62,065,851 Less unamortized issuance costs (725,592) Net principal payments and debt maturities $ 61,340,259 |
Rentals under Operating Leases
Rentals under Operating Leases | 12 Months Ended |
Dec. 31, 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 December 31, 2022 are as follows: 2023 $ 7,682,310 2024 6,369,691 2025 5,483,337 2026 3,798,457 2027 2,822,424 Thereafter 7,577,626 Total minimum rents $ 33,733,845 |
Equity
Equity | 12 Months Ended |
Dec. 31, 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 98.81% and 98.69% interest in the Operating Partnership as of December 31, 2022 and 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. Shelf Registration On June 21, 2021, the Company filed a shelf registration statement on Form S-3 with the United States Securities and Exchange Commission (“SEC”). The registration statement is intended to provide the Company additional flexibility to finance future business opportunities through timely and cost-effective access to capital markets. Under the shelf registration statement, the Company may, from time to time, issue common stock up to an aggregate amount of $150 million. The shelf registration statement was declared effective by the SEC on July 27, 2021. The Company has incurred $84,926 in legal costs, filing fees and other costs associated with this registration which are recorded as offering costs as part of stockholders' equity on the Company’s consolidated balance sheet as of December 31, 2022 and 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 December 31, 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 1.055 500,000 April 1, 2022 325,732 1.075 350,313 Total 1,445,400 $ 1.065 $ 1,538,887 Common Stock Repurchase Plan In December 2021, the Board approved a program to purchase up to 500,000 shares of the Company’s common stock in the open market, up to a maximum price of $4.80 per share. The repurchase program does not obligate the Company to acquire any particular amount of shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. As of December 31, 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 December 31, 2022 and 2021, respectively, there were 17,971,952 and 16,266,148 common units of the Operating Partnership outstanding with the REIT owning 17,758,421 and 16,052,617, respectively, of these common units. The remaining 213,531 common units are held by noncontrolling, limited partners. As of December 31, 2022 and 2021, respectively, there were 17,758,421 and 16,052,617 Common Shares of the REIT outstanding. As of December 31, 2022 and 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 “Equity Incentive Plan”) was adopted by the Board on July 27, 2018 and approved by the Company’s shareholders on August 23, 2018. The Equity Incentive 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 Equity Incentive 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 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, under the Equity Incentive Plan. The effective date of the grants was March 16, 2021. The Common Shares granted vest immediately and are unrestricted. However, the Equity Incentive Plan includes other restrictions on the sale of shares issued under the Equity Incentive Plan. Because the Common Shares vested immediately, the fair value of the grants, or $149,981, was recorded to share based compensation expense on the Company’s consolidated statements of operations on the effective date of the grant. The fair value of the grants was determined by the market price of the Company’s Common Shares on the effective date of the grant. On March 2, 2022, the 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, under the Equity Incentive Plan. The effective date of the grants was March 2, 2022. The Common Shares granted vest immediately and are unrestricted. However, the Equity Incentive Plan includes other restrictions on the sale of shares issued under the Equity Incentive 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 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 November 22, 2022, the Compensation Committee approved a grant of 76,434 Common Shares to two employees of the Manager who also serve as directors of the Company, a grant of 114,651 Common Shares to the Company’s three independent directors, a grant of 76,433 shares to the chief financial officer of the Company, and a grant of 50,956 Common Shares to two consultants of the Company, under the Equity Incentive Plan. The effective date of the grants was November 22, 2022. The Common Shares granted vest immediately and are unrestricted. However, the Equity Incentive Plan includes other restrictions on the sale of shares issued under the Equity Incentive Plan. Because the Common Shares vested immediately, the fair value of the grants, or $250,000, was recorded to share based compensation expense on the Company’s consolidated statements of operations on the effective date of the grant. The fair value of the grants was determined by the market price of the Company’s Common Shares on the effective date of the grant. On each January 1 during the term of the Equity Incentive Plan, the maximum number of shares of common stock that may be issued under the Equity Incentive 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, 2023, the shares available for issuance under the Equity Incentive Plan was adjusted to 491,304 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 the years ended December 31, 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: Year ended December 31, 2022 2021 Basic and diluted shares outstanding Weighted average Common Shares – basic 17,122,617 13,092,937 Effect of conversion of operating partnership units 213,531 213,531 Weighted average Common Shares – diluted 17,336,148 13,306,468 Calculation of earnings per share – basic and diluted Net loss attributable to common shareholders $ (4,769,241) $ (4,364,264) Weighted average Common Shares – basic and diluted 17,122,617 13,092,937 Loss per share – basic and diluted $ (0.28) $ (0.33) Dividends and Distributions During the year ended December 31, 2022, dividends in the amount of $0.02 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, and dividends in the amount of $0.01 per share were paid on October 20, 2022, to shareholders of record on October 17, 2022. During the year ended December 31, 2021, dividends in the amount of $0.02 per share were paid on August 5, 2021 to shareholders of record on August 2, 2021, on October 27, 2021 to shareholders of record on October 25, 2021. Total dividends and distributions to noncontrolling interests paid during years ended December 31, 2022 and 2021, respectively, are as follows: Year ended December 31, 2022 2021 Common shareholders (dividends) $ 1,188,433 $ 642,105 Hampton Inn Property noncontrolling interest (distribution) — 466,258 Hanover Square Property noncontrolling interest (distributions) 57,200 34,400 Parkway Property noncontrolling interest (distributions) 48,600 — Operating Partnership unit holders (distributions) 14,947 8,541 Total dividends and distributions $ 1,309,180 $ 1,151,304 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 had 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”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was given one hundred and eighty (180) calendar days, or until January 9, 2023, to regain compliance with the Minimum Bid Price Requirement. On January 10, 2023, the Company received a letter (the “Second Notification”) from Nasdaq notifying the Company that, while the Company had not regained compliance with the Minimum Bid Price Requirement, the Staff determined that the Company is eligible for an additional 180 calendar day period, or until July 10, 2023 (the “Second Compliance Period”), to regain compliance. The Staff’s determination was based on (i) the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on The Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and (ii) the Company’s written notice to Nasdaq of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. If at any time during the Second Compliance Period, the closing bid price of the Company’s common stock is at least $1.00 per share for a minimum of 10 consecutive business days, Nasdaq will provide the Company with written confirmation of compliance. If compliance with the Minimum Bid Price Requirement cannot be demonstrated by July 10, 2023, the Staff will provide written notification that the Company’s common stock will be delisted. At that time, the Company may appeal the Staff’s determination to a Hearings Panel. Neither the Deficiency Letter or the Second Notification had any effect on the listing of the Company’s common stock, and its common stock continues to trade on The Nasdaq Capital Market under the symbol “MDRR”. 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 | 12 Months Ended |
Dec. 31, 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% of the total annualized base revenues of the properties in its portfolio as of December 31, 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. Interest Rate Risk The value of the Company’s real estate is subject to fluctuations based on changes in interest rates and fluctuations based on local and regional economic conditions and changes in the creditworthiness of lessees, all of which may affect the Company’s ability to refinance property-level mortgage debt when balloon payments are scheduled. Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political conditions, and other factors beyond our control. An increase in interest rates would likely cause the value of the Company’s assets to decrease. Increases in interest rates may also have an impact on the credit profile of certain tenants. The Company is exposed to the impact of interest rate changes primarily through its borrowing activities. To limit this exposure, the Company attempts to obtain mortgage financing on a long-term, fixed-rate basis. However, from time to time, the Company may obtain variable-rate mortgage loans and, as a result, may enter into interest rate cap agreements that limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. These interest rate caps are derivative instruments designated as cash flow hedges on the forecasted interest payments on the debt obligation. Our objective in using interest rate caps is to limit our exposure to interest rate movements. As of December 31, 2022 and 2021, all of the Company’s long-term debt either bore interest at fixed rates, or was capped to a fixed rate, or bore interest at fixed rates that were scheduled to convert to then-prevailing market fixed rates at certain future points during their term. The Company’s debt obligations are more fully described in Note 5, Loans Payable, above. 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 Annual Report, 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 years ended December 31, 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 consolidated statement of operations and as rent and other receivables on the Company’s consolidated balance sheets. As of December 31, 2022, all rent deferral periods have ended and, in all cases, tenants are either current on or have completed repayment of the deferred rent amounts. 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 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 | 12 Months Ended |
Dec. 31, 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 consolidated financial statements prepared in accordance with GAAP, and (2) one-time events pursuant to changes in GAAP, and certain non-cash items not otherwise described above, in each case after discussions between the Company’s Manager and its independent director(s) and approval by a majority of its independent directors. For the years ended December 31, 2022 and 2021, the Company incurred $876,049 and $817,029, in asset management fees, respectively. Asset management fees are recorded on the Company’s consolidated statements of operations as (i) retail center property operating expenses ($309,078 and $258,628 for the years ended December 31, 2022 and 2021, respectively) , (ii) hotel property operating expenses ($20,475 and $96,868 for the years ended December 31, 2022 and 2021, respectively), (iii) flex center property operating expenses ($109,100 and $50,300 for the years ended December 31, 2022 and 2021, respectively) and (iv) legal, accounting and other professional fees ($437,396 and $411,233 for the years ended December 31, 2022 and 2021, 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 consolidated balance sheets. On March 19, 2021, pursuant to the Manager Letter Agreements, the Manager agreed to the Deferral Agreement For the year ended December 31, 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 in connection with the Deferral Agreement. For the year ended December 31, 2021, the Company incurred $503,910 in acquisition fees associated with the Lancer Center Property, Greenbrier Business Center Property and Parkway Property, which were allocated and added to the fair value of the Lancer Center Property, Greenbrier Business Center Property and Parkway Property tangible assets. One half of the acquisition fees, or $251,955 was paid in cash and one half of the acquisition fees was accrued in connection with the Deferral Agreement. The accrued portion of the acquisition fee is recorded under accounts payable and accrued liabilities on the Company’s consolidated balance sheets as of December 31, 2022 and 2021. As of December 31, 2022 and 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 year ended December 31, 2022 or 2021. Colin Elliott Effective as of March 1, 2020, the Company entered into a Consulting Agreement (the “Consulting Agreement”), with Gunston Consulting, LLC (the “Consultant”), pursuant to which the Consultant agreed to provide certain financial and accounting consulting services to the Company, and the Company agreed to pay the Consultant an annual fee and annual stock grants awarded by the Compensation Committee and agreed to reimburse the Consultant for certain expenses to be authorized by the Company. Pursuant to the terms of the Consulting Agreement, the Company authorized the Consultant to retain the services of Mr. C. Elliott as vice president of the Company and authorized the Consultant to incur certain costs related to Mr. C. Elliott’s employment as vice president and agreed to reimburse the Consultant for such costs, including Mr. C. Elliott’s $150,000 annual salary, payroll taxes and certain benefits and an annual bonus to be determined in consultation with the Company. In addition, pursuant to the Change in Control Agreement (as described herein), in the event that (i) a Change in Control occurs at a time when Mr. C. Elliott remains employed by the Consultant and no Cause Event (as defined therein) has then occurred and the Consultant thereafter terminates, at the Company’s (or any successor’s) request, the employment of Mr. C. Elliott (other than on account of a Cause Event) within twelve (12) months after the date of the Change in Control; (ii) a Change in Control occurs at a time when Mr. C. Elliott remains employed by the Consultant and no Cause Event has then occurred and within twelve (12) months after the date of the Change in Control Mr. C. Elliott elects to terminate his engagement with the Consultant to provide services to the Company (or any successor) because either (a) the Company or any successor requires Mr. C. Elliott to relocate his primary work location by more than fifty (50) miles from the location as of the effective date of the Change in Control Agreement; (b) the Company or any successor directs the Consultant to reduce the annual compensation ($150,000) of Mr. C. Elliott; (c) the Company (or any successor) directs the Consultant to materially diminish Mr. C. Elliott’s position, authority, duties or responsibilities with respect to services to the Company (or any successor); or (d) the Company (or any successor) commit a material breach of the Consulting Agreement and fail to cure such material breach within thirty (30) days after receiving written notice of such material breach; or (iii) the Consultant terminates, at the Company’s request, Mr. C. Elliott’s employment (other than on account of a Cause Event) ninety (90) or fewer days prior to the Change in Control, then a “Triggering Event” (as defined therein) will be deemed to have occurred, and the Company has authorized the Consultant to pay, and has agreed to reimburse the Consultant for, and the Consultant is required to pay to Mr. C. Elliott, the Elliott Retention Amount. Mr. C. Elliott is the son of Mr. William R. Elliott, Vice Chairman of the Company’s Board and President and Chief Operating Officer of the Company. During the years ended December 31, 2022 and 2021, the Company paid the Consultant $114,516 and $0, for services provided by Mr. C. Elliott under the Consulting Agreement. In addition, on November 22, 2022, the Compensation Committee approved a grant of 38,217 shares of the Company’s common stock to Mr. C. Elliott under the Equity Incentive Plan. 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% interest, an annual property management fee of up to 3% 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 years ended December 31, 2022 and 2021, the Company paid Shockoe Properties, LLC property management fees of $271,334 and $200,216 , respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 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 December 31, 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 year ended December 31, Hotel properties Retail center properties Flex center property Total 2022 2021 2022 2021 2022 2021 2022 2021 Revenues $ 1,507,649 $ 4,635,331 $ 7,053,757 $ 5,634,396 $ 2,529,919 $ 1,202,822 $ 11,091,325 $ 11,472,549 Operating expenses 1,335,801 3,102,951 1,912,110 1,518,973 684,843 343,717 3,932,754 4,965,641 Bad debt expense — — 38,401 38,346 8,531 678 46,932 39,024 Net operating income $ 171,848 $ 1,532,380 $ 5,103,246 $ 4,077,077 $ 1,836,545 $ 858,427 $ 7,111,639 $ 6,467,884 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events | |
Subsequent Events | 11. Subsequent Events As of March 10, 2023, the following events have occurred subsequent to the December 31, 2022 effective date of the consolidated financial statements: Common Stock Dividend On January 27, 2023, a dividend in the amount of $0.01 per share was paid to common stock shareholders and operating partnership unit holders of record on January 24, 2023. Mandatorily Redeemable Preferred Stock Dividend On January 27, 2023, a dividend in the amount of $0.50 per share was paid to mandatorily redeemable preferred stock shareholders of record on January 24, 2023 for the period from July 21, 2022 through October 19, 2022. Establishment of a Special Committee of the Board and Exploration of Strategic Alternatives |
Schedule III - Real Estate Prop
Schedule III - Real Estate Properties and Accumulated Depreciation | 12 Months Ended |
Dec. 31, 2022 | |
Schedule III - Real Estate Properties and Accumulated Depreciation | |
Schedule III - Real Estate Properties and Accumulated Depreciation | Medalist Diversified REIT, Inc. and Subsidiaries Schedule III - Real Estate Properties and Accumulated Depreciation December 31, 2022 Initial Cost to Company Gross Amount at Which Carried at Close of Period Buildings, Costs Written Life on Which Improvements Costs Off Due to Depreciation and Furniture, Capitalized Impairment Fully Buildings in Latest Encum- Fixtures & Subsequent to and Loss on Amortized and Accumulated Date of Date Income Statements Description brances Land Equipment Acquisition Disposition Improvements Land Improvements Total Depreciation Construction Acquired is Computed Retail properties The Shops at Franklin Square $ 13,250,000 $ 3,343,164 $ 15,418,158 (1) $ 1,033,712 $ (309,435) $ (291,035) $ 3,343,164 $ 15,851,400 $ 19,194,564 $ 3,115,825 2006 April 28, 2017 Building - 38 years Gastonia, North Carolina Site Improvements - 13 years Hanover North Shopping Center 9,877,867 3,158,882 8,334,478.00 (1) 276,148.00 — (305,324) 3,158,882 8,305,302 11,464,184 1,261,870 2007 May 8, 2018 Building - 39 years Mechanicsville, Virginia Site Improvements - 12 years Ashley Plaza Shopping Center 10,930,370 3,007,721 11,191,307 (1) 165,891 — (6,132) 3,007,721 11,351,066 14,358,787 2,024,945 1977 August 30, 2019 Building - 26.7 years Goldsboro, North Carolina Site Improvements - 5 years Lancer Center Shopping Center — (2) 2,195,125 7,684,251 (1) 256,338 (11,727) — 2,195,125 7,928,862 10,123,987 1,198,668 1978 May 14, 2021 Building - 14.2 years Lancaster, South Carolina Site Improvements - 7.5 years Salisbury Shopping Center — (2) 2,383,881 7,579,377 (1) 15,071 — — 2,383,881 7,594,448 9,978,329 320,501 1987 June 13, 2022 Building - 25 years Salisbury, North Carolina Site Improvements - 5 years Total retail properties 34,058,237 14,088,773 50,207,571 1,747,160 (321,162) (602,491) 14,088,773 51,031,078 65,119,851 7,921,809 Flex property Brookfield Center 4,663,206 714,220 5,693,147 (1) 148,048 — (2,456) 714,220 5,838,739 6,552,959 847,914 2007 October 3, 2019 Building - 40 years Greenville, South Carolina Site Improvements - 4.3 years Greenbrier Business Center — (2) 1,292,894 5,603,909 (1) 52,176 — (9,786) 1,292,894 5,646,299 6,939,193 341,562 1987 August 27, 2021 Building - 26 years Chesapeake, Virginia Site Improvements - 10 years Parkway Center 4,992,427 430,549 6,846,487 (1) 33,190 (6,369) — 430,549 6,873,308 7,303,857 289,623 1984 November 1, 2021 Building - 42 years Virginia Beach, Virginia Site Improvements - 11 years Total flex properties $ 9,655,633 $ 2,437,663 $ 18,143,543 $ 233,414 $ (6,369) $ (12,242) $ 2,437,663 $ 18,358,346 $ 20,796,009 $ 1,479,099 Wells Fargo Mortgage Facility 18,351,981 Total investment properties $ 62,065,851 $ 16,526,436 $ 68,351,114 $ 1,980,574 $ (327,531) $ (614,733) $ 16,526,436 $ 69,389,424 $ 85,915,860 $ 9,400,908 (1) Excludes intangible assets (2) Encumbered by Wells Fargo Mortgage Facility. Greenbrier Franklin Hanover Hampton Ashley Clemson Brookfield Lancer Business Square Square Inn Plaza Best Western (1) Center Center Center Parkway Salisbury Total Investments in real estate - 2022 Balance at beginning of period - January 1, 2022 $ 19,220,574 $ 11,683,302 $ — $ 14,296,145 $ 10,568,508 $ 6,445,169 $ 10,071,797 $ 6,898,842 $ 7,280,306 $ — $ 86,464,643 Changes during period: Acquisitions — — — — — — — — — 9,963,258 9,963,258 Capitalized leasing commissions 139,941 45,672 — 30,679 — 17,188 11,198 40,260 13,372 2,021 300,331 Capitalized tenant improvements 10,624 — — 27,363 — 93,058 39,520 — 6,808 — 177,373 Building and site improvements — 10,738 — 4,600 226,508 — 13,199 9,877 9,740 13,050 287,712 Furniture, fixtures and equipment — — — — 253,887 — — — — — 253,887 Loss on impairment of tangible assets — — — — — — (8,681) — (5,199) — (13,880) Impairment of assets held for sale — — — — (175,671) — — — — — (175,671) Fully depreciated assets (176,576) (275,527) — — — (2,456) (3,046) (9,786) (1,170) — (468,561) Dispositions of investment properties — — — — (10,873,232) — — — — — (10,873,232) Balance at end of period - December 31, 2022 $ 19,194,564 $ 11,464,185 $ — $ 14,358,787 $ — $ 6,552,959 $ 10,123,987 $ 6,939,193 $ 7,303,857 $ 9,978,329 $ 85,915,860 Accumulated depreciation - 2022 Balance at beginning of period $ 2,686,982 $ 1,226,885 $ — $ 1,411,023 $ 722,300 $ 579,739 $ 455,898 $ 86,014 $ 41,679 $ — $ 7,210,520 Additions charged to costs and expenses 605,419 310,512 — 613,922 — 270,631 745,816 265,334 249,114 320,501 3,381,249 Write off accumulated depreciation of property disposed / fully depreciated assets (176,576) (275,527) — — (722,300) (2,456) (3,046) (9,786) (1,170) — (1,190,861) Balance at end of period $ 3,115,826 $ 1,261,870 $ — $ 2,024,945 $ — $ 847,914 $ 1,198,668 $ 341,562 $ 289,623 $ 320,501 $ 9,400,908 Net investments in real estate - December 31, 2022 $ 16,078,739 $ 10,202,315 $ — $ 12,333,842 $ — $ 5,705,045 $ 8,925,319 $ 6,597,631 $ 7,014,234 $ 9,657,828 $ 76,514,953 Investments in real estate - 2021 Balance at beginning of period - January 1, 2021 $ 19,251,826 $ 11,617,856 $ 13,972,091 $ 14,282,764 $ 10,405,855 $ 6,437,433 $ — $ — $ — $ — $ 75,967,825 Changes during period: Acquisitions — — — — — — 9,879,376 6,896,803 7,277,036 — 24,053,215 Capitalized leasing commissions 15,348 9,992 — 19,513 — 7,736 15,560 2,039 3,270 — 73,458 Capitalized tenant improvements 45,150 — — - — — 97,929 — — — 143,079 Building and site improvements 14,967 85,250 — — 129,654 — 78,932 — — — 308,803 Fully depreciated assets (106,717) (29,796) — (6,132) — — — — — — (142,645) Furniture, fixtures and equipment — — — — 32,999 — — — — — 32,999 Dispositions of investment properties — — (13,972,091) — - — — — — — (13,972,091) Balance at end of period - December 31, 2021 $ 19,220,574 $ 11,683,302 $ — $ 14,296,145 $ 10,568,508 $ 6,445,169 $ 10,071,797 $ 6,898,842 $ 7,280,306 $ — $ 86,464,643 Accumulated depreciation - 2021 Balance at beginning of period $ 2,181,039 $ 909,211 $ 1,561,841 $ 808,059 $ 722,300 $ 319,263 $ — $ — $ — $ — $ 6,501,713 Additions charged to costs and expenses 505,943 317,674 — 602,964 — 260,476 455,898 86,014 41,679 — 2,270,648 Impairment write-offs — — (1,561,841) — — — — — — — (1,561,841) Balance at end of period $ 2,686,982 $ 1,226,885 $ — $ 1,411,023 $ 722,300 $ 579,739 $ 455,898 $ 86,014 $ 41,679 $ — $ 7,210,520 Net investments in real estate - December 31, 2021 $ 16,533,592 $ 10,456,417 $ — $ 12,885,122 $ 9,846,208 $ 5,865,430 $ 9,615,899 $ 6,812,828 $ 7,238,627 $ — $ 79,254,123 (1) Recorded as an asset held for sale on the Company’s consolidated balance sheet as of December 31, 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 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 4 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 and the impairment of assets held for sale described below, the Company did not record any impairment adjustments to its investment properties resulting from events or changes in circumstances during the years ended December 31, 2022 and 2021, that would result in the projected value being below the carrying value of the Company’s properties. During the year ended December 31, 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 these properties should be written off. As a result, the Company recorded a loss on impairment of $36,670 for the year ended December 31, 2022. No such tenant-related loss on impairment was recorded during the year ended December 31, 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 was initially classified as held for sale, the Company 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 consolidated statement of operations for the year ended December 31, 2022. No such impairment of assets held for sale was recorded during the year ended December 31, 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 year ended December 31, 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 Details of the deferred costs, net of amortization, arising from the Company’s purchases of its retail center properties and flex center properties are as follows: December 31, 2022 2021 Intangible assets, net Leasing commissions $ 1,135,421 $ 1,153,736 Legal and marketing costs 169,437 163,019 Above market leases 209,860 360,509 Net leasehold asset 2,233,988 2,523,128 $ 3,748,706 $ 4,200,392 Intangible liabilities, net Below market leases $ (2,234,113) $ (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 year ended December 31, 2022 and 2021, respectively, were as follows: For the year ended December 31, 2022 2021 Amortization of above market leases $ (188,903) $ (250,504) Amortization of below market leases 415,624 274,528 $ 226,721 $ 24,024 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 years ended December 31, 2022 and 2021, respectively, were as follows: For the year ended December 31, 2022 2021 Leasing commissions $ (246,294) $ (208,650) Legal and marketing costs (65,760) (37,441) Net leasehold asset (1,013,520) (847,474) $ (1,325,574) $ (1,093,565) As of December 31, 2022 and 2021, the Company’s accumulated amortization of lease origination costs, leases in place and legal and marketing costs totaled $2,198,049 and $2,779,370, respectively. During the years ended December 31, 2022 and 2021, the Company wrote off $1,901,786 and $667,298, respectively, in accumulated amortization related to fully amortized intangible assets and $5,109 and $0, 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: 2023 2024 2025 2026 2027 2028-2042 Total Intangible Assets Leasing commissions $ 219,221 $ 173,352 $ 145,550 $ 107,312 $ 88,394 $ 401,592 $ 1,135,421 Legal and marketing costs 61,506 39,837 24,004 13,160 7,917 23,013 169,437 Above market leases 97,960 45,608 21,526 15,629 14,543 14,594 209,860 Net leasehold asset 623,930 400,511 295,851 199,466 153,142 561,088 2,233,988 $ 1,002,617 $ 659,308 $ 486,931 $ 335,567 $ 263,996 $ 1,000,287 $ 3,748,706 Intangible Liabilities Below market leases, net $ (368,802) $ (285,892) $ (213,348) $ (178,776) $ (161,866) $ (1,025,429) $ (2,234,113) |
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 years ended December 31, 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 December 31, 2022, the Company held two cash accounts at a single financial institution with combined balances that exceeded the FDIC limit by $2,613,789. 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 December 31, 2022 and 2021, the Company reported $267,854 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 December 31, 2022 and 2021, the Company reported $579,785 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 December 31, 2022 and 2021, the Company reported $893,078 and $1,267,470, respectively, in capital property reserves. December 31, Property and Purpose of Reserve 2022 2021 Clemson Best Western Property - improvements — 50,012 Clemson Best Western Property - furniture, fixtures and equipment — 275,109 Franklin Square Property - leasing costs 845,765 700,000 Brookfield Center Property - maintenance and leasing cost reserve 47,313 92,349 Greenbrier Business Center - capital reserve — 150,000 Total $ 893,078 $ 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 consolidated balance sheets. During the year ended December 31, 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 consolidated balance sheet. No such amounts were recorded during the year ended December 31, 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 consolidated balance sheets. As of December 31, 2022 and 2021, the Company reported $1,022,153 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 consolidated statements of operations under the captions "Retail center property revenues” and “Flex center property 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. During the years ended December 31, 2022 and 2021, respectively, the Company recognized $311,116 and $113,493, in retail center and flex center property tenant reimbursement revenues resulting from differences between the final billed amounts and previously estimated recoveries. The Company includes these tenant reimbursement revenues on the consolidated statements of operations under the captions "Retail center property revenues” and “Flex center property revenues.” 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 year ended December 31, 2022 no such termination fees were recorded. During the year ended December 31, 2021, the Company received a $200,000 lease termination fee from a tenant in the Company’s Franklin Square Property. The Company recorded this revenue as other income on the Company’s consolidated statements of operation for the year ended December 31, 2021. Upon early lease termination, any unrecovered intangibles and other assets are written off as a loss on impairment. All unrecovered intangibles and other assets associated with the tenant in the Company’s Franklin Square Property which terminated its lease had been fully depreciated or amortized prior to the termination. Accordingly, during the years ended December 31, 2022 and 2021, respectively, no loss on impairment related to the Franklin Square tenant was recognized. However, during the year ended December 31, 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 consolidated statement of operations for the year ended December 31, 2022. No such loss on impairment was recorded for the year ended December 31, 2021. Hotel Property Revenues Hotel revenues from the Clemson Best Western Property (and for prior year periods, the Hampton Inn Property) were 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 were 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 and the Company sold the Clemson Best Western Property on September 29, 2022. The Clemson Best Western Property (and for prior year periods, the Hampton Inn Property) was 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 had a legal obligation to act as a collection agent. The Clemson Best Western Property did not retain these taxes and fees; therefore, they were not included in revenues. The Clemson Best Western Property recorded a liability when the amounts were collected and relieved the liability when payments were 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) were 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 reimbursed 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 years ended December 31, 2022 and 2021 were $478,774 and $468,897 , respectively $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 December 31, 2022 and 2021, the Company’s allowance for uncollectible rent totaled $47,109 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 December 31, 2022 and 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 year ended December 31, 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 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 consolidated balance sheets but separate from the Company’s equity. On the consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. The Company’s consolidated statements of changes in stockholders’ equity includes beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity. The first noncontrolling interest is in the Hampton Inn Property, 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 year ended December 31, 2021, 22% of the Hampton Inn’s net income of $66,595 , or The second noncontrolling interest is in the Hanover Square Property in which the Company owns an 84% tenancy in common interest through its subsidiary and an outside party owns a 16% tenancy in common interest. The Hanover Square Property’s net income (loss) is allocated to the noncontrolling ownership interest based on its 16% ownership. During the year ended December 31, 2022, 16% of the Hanover Square Property’s net income of $237,651 or $38,023 $54,888 $8,781 The third noncontrolling interest is in the Parkway Property in which the Company owns an 82% tenancy in common interest through its subsidiary and an outside party owns an 18% tenancy in common interest. The Parkway Property's net income (loss) is allocated to the noncontrolling ownership interest based on its 18% ownership. During the year ended December 31, 2022, 18% of the Parkway Property's net income of $105,972 $19,076 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% of the noncontrolling owner’s tenant in common interest in the Hampton Inn Property. On August 31, 2020, a unitholder converted 5,319 Operating Partnership units into shares of Common Stock. As of December 31, 2022, respectively, there were 213,531 Operating Partnership units outstanding. The Operating Partnership units not held by the REIT represent 1.19% and 1.31% of the outstanding Operating Partnership units as of the year ended December 31, 2022 and 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 year ended December 31, 2022, a weighted average of 1.22 % of the Operating Partnership’s net loss of $1,651,829 , or $20,072 , was allocated to the noncontrolling unit holders. During the year ended December 31, 2021, a weighted average of 1.82 % of the Operating Partnership’s net income of $214,333 , or $3,903 , was allocated to the noncontrolling unit holders. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Since its initial public offering, the Company has elected to be classified as an Emerging Growth Company in its periodic reporting to the Securities and Exchange Commission, and accordingly has followed the private company implementation dates for new accounting pronouncements. Effective for the three months ending March 31, 2023, the Company will no longer be classified as an Emerging Growth Company, but will retain its classification as a smaller reporting company and therefore follow implementation dates applicable to smaller reporting companies with respect to new accounting pronouncements. Recently Adopted Accounting Pronouncements Accounting for Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) Leases 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 consolidated statements of operations for the year ended December 31, 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 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 consolidated statement of operations for the year ended December 31, 2021, to conform to the 2022 financial statement presentation. The prior period operating lease income flex center property tenant 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. 2020-06 adds several incremental financial statement disclosures with respect to a company’s convertible financial instruments and makes certain refinements with respect to calculating the effect of those instruments on a company’s diluted earnings per share. ASU 2020-06 is effective for public companies for fiscal years beginning after December 15, 2021 (including interim periods within those fiscal years), and for private companies, fiscal years beginning after December 15, 2023. Early adoption of the guidance is permitted, but no earlier than fiscal years beginning after December 15, 2020. As discussed in Note 5, below, during the period from October 2020 to January 2021, the Company issued debentures that were convertible into shares of its common stock. While those debentures were subject to the accounting guidance for convertible financial instruments, they were fully converted into common stock during the period from January to May 2021 and are no longer outstanding. The updated guidance in ASU 2020-06 will be applied to any future convertible financial instruments that the Company may issue. Upcoming Accounting Pronouncements 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. Under ASU 2020-04, companies may generally elect to make use of the expedients and exceptions provided therein for any reference rate contract modifications that occur in reporting periods that encompass the timeline from March 12, 2020 to December 31, 2022. The FASB subsequently issued ASU 2022-06, , to extend that timeline from December 31, 2022 to December 31, 2024. 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 consolidated financial statements. Evaluation of the Company’s Ability to Continue as a Going Concern Under the accounting guidance related to the presentation of financial statements, the Company is required to evaluate, on a quarterly basis, whether or not the entity’s current financial condition, including its sources of liquidity at the date that the consolidated financial statements are issued, will enable the entity to meet its obligations as they come due arising within one year of the date of the issuance of the Company’s consolidated financial statements and to make a determination as to whether or not it is probable, under the application of this accounting guidance, that the entity will be able to continue as a going concern. The Company’s consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In applying applicable accounting guidance, management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows, the Company’s obligations due over the next twelve months as well as the Company’s recurring business operating expenses. The Company concludes that it is probable that the Company will be able to meet its obligations arising within one year of the date of issuance of these consolidated financial statements within the parameters set forth in the accounting guidance. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of net intangible assets and liabilities | December 31, 2022 2021 Intangible assets, net Leasing commissions $ 1,135,421 $ 1,153,736 Legal and marketing costs 169,437 163,019 Above market leases 209,860 360,509 Net leasehold asset 2,233,988 2,523,128 $ 3,748,706 $ 4,200,392 Intangible liabilities, net Below market leases $ (2,234,113) $ (1,880,612) |
Schedule of adjustments to rental revenue related to the above and below market leases | For the year ended December 31, 2022 2021 Amortization of above market leases $ (188,903) $ (250,504) Amortization of below market leases 415,624 274,528 $ 226,721 $ 24,024 |
Schedule of amortization related to intangible assets | For the year ended December 31, 2022 2021 Leasing commissions $ (246,294) $ (208,650) Legal and marketing costs (65,760) (37,441) Net leasehold asset (1,013,520) (847,474) $ (1,325,574) $ (1,093,565) |
Schedule of future amortization of above and below market leases | 2023 2024 2025 2026 2027 2028-2042 Total Intangible Assets Leasing commissions $ 219,221 $ 173,352 $ 145,550 $ 107,312 $ 88,394 $ 401,592 $ 1,135,421 Legal and marketing costs 61,506 39,837 24,004 13,160 7,917 23,013 169,437 Above market leases 97,960 45,608 21,526 15,629 14,543 14,594 209,860 Net leasehold asset 623,930 400,511 295,851 199,466 153,142 561,088 2,233,988 $ 1,002,617 $ 659,308 $ 486,931 $ 335,567 $ 263,996 $ 1,000,287 $ 3,748,706 Intangible Liabilities Below market leases, net $ (368,802) $ (285,892) $ (213,348) $ (178,776) $ (161,866) $ (1,025,429) $ (2,234,113) |
Schedule of property and purpose of reserve | December 31, Property and Purpose of Reserve 2022 2021 Clemson Best Western Property - improvements — 50,012 Clemson Best Western Property - furniture, fixtures and equipment — 275,109 Franklin Square Property - leasing costs 845,765 700,000 Brookfield Center Property - maintenance and leasing cost reserve 47,313 92,349 Greenbrier Business Center - capital reserve — 150,000 Total $ 893,078 $ 1,267,470 |
Investment Properties (Tables)
Investment Properties (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Schedule of investment properties | December 31, 2022 2021 Land $ 16,526,436 $ 14,142,555 Site improvements 4,719,926 4,431,338 Buildings and improvements (1) 64,669,498 57,322,242 Investment properties at cost (2) 85,915,860 75,896,135 Less accumulated depreciation 9,400,908 6,488,220 Investment properties, net $ 76,514,952 $ 69,407,915 (1) Includes tenant improvements (both those acquired as part of the acquisition of the properties and those constructed after the properties’ 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 | December 31, 2022 2021 Capitalized tenant improvements – acquisition cost allocation, net $ 3,178,534 $ 1,840,612 Capitalized tenant improvements incurred subsequent to acquisition, net 338,836 257,340 December 31, 2022 2021 Capitalized leasing commissions, net $ 555,956 $ 356,327 |
Schedule of assets held for sale and liabilities associated with assets held for sale | December 31, 2022 2021 Investment properties, net $ — $ 9,846,208 Total assets held for sale $ — $ 9,846,208 December 31, 2022 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, which was sold on September 29, 2022 and the Hampton Inn Property, which was sold on August 31, 2021, which are included in continuing operations, are as follows: For the year ended December 31, 2022 2021 Hotel property room revenues $ 1,494,836 $ 4,590,372 Hotel property other revenues 12,813 44,959 Total Revenue 1,507,649 4,635,331 Hotel property operating expenses 1,335,801 3,102,951 Depreciation and amortization — — Total Operating Expenses 1,335,801 3,102,951 (Loss) gain on disposal of investment properties (421,096) 124,641 Operating (Loss) Income (249,248) 1,657,021 Interest expense 427,244 1,066,790 Net (Loss) Income from Operations (676,492) 590,231 Other expense (48) (166) Net (Loss) Income (676,540) 590,065 Net income attributable to Hampton Inn Property noncontrolling interests — 14,651 Net (loss) income attributable to Operating Partnership noncontrolling interests (12,827) 13,898 Net Loss (Income) Attributable to Medalist Common Shareholders (663,713) 561,516 |
Schedule of fair values of assets acquired and liabilities assumed | Lancer Greenbrier Center Business Center Parkway Property Property Property Total Fair value of assets acquired: Investment property (a) $ 9,902,876 $ 6,896,803 $ 7,277,036 $ 24,076,715 Lease intangibles and other assets (b) 1,023,753 583,940 472,288 2,079,981 Restricted cash acquired (c) — 150,000 — 150,000 Above market leases (b) 157,438 48,186 2,494 208,118 Below market leases (b) (878,682) (100,167) (153,794) (1,132,643) Fair value of net assets acquired (d) $ 10,205,385 $ 7,578,762 7,598,024 $ 25,382,171 Purchase consideration: Consideration paid with cash (e) $ 3,783,515 $ 3,097,162 2,138,795 $ 9,019,472 Consideration paid by noncontrolling owner — — 469,492 469,492 Consideration paid with new mortgage debt, net (f) 6,421,870 — 4,989,737 11,411,607 Consideration paid with assumed mortgage debt, net (g) — 4,481,600 — 4,481,600 Total consideration (h) $ 10,205,385 $ 7,578,762 7,598,024 $ 25,382,171 a. Represents the fair value of the investment property acquired which includes land, buildings, site improvements, tenant improvements and furniture, fixtures and equipment. The fair value was determined using the market approach, the cost approach, the income approach or a combination thereof. Closing and acquisition costs were allocated and added to the fair value of the tangible assets acquired. b. Represents the fair value of lease intangibles and other assets. Lease intangibles include leasing commissions, leases in place, above market leases, below market leases and legal and marketing costs associated with replacing existing leases. c. Represents an operating reserve funded by the Company at closing. d. Represents the total fair value of assets and liabilities acquired at closing. e. Represents cash paid at closing and cash paid for acquisition (including intangible assets), and closing costs paid at closing or directly by the Company outside of closing. f. 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) | 12 Months Ended |
Dec. 31, 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 % 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 January 27, 2023 January 24, 2023 0.50 October 20, 2022 - January 19, 2023 |
Loans Payable (Tables)
Loans Payable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Loans Payable | |
Schedule of mortgages payables, net | The Company’s mortgages payables, net consists of the following: Monthly Interest December 31, Property Payment Rate Maturity 2022 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 9,877,867 10,134,667 Ashley Plaza (c) $ 52,795 3.75 % September 2029 10,930,370 11,127,111 Brookfield Center (d) $ 22,876 3.90 % November 2029 4,663,206 4,758,344 Parkway Center (e) $ 19,720 Variable October 2026 4,992,427 5,090,210 Wells Fargo Facility (f) $ 103,438 4.50 % June 2027 18,351,981 — Lancer Center (g) — 6,488,034 Greenbrier Business Center (h) — 4,495,000 Unamortized issuance costs, net (725,592) (825,544) Total mortgages payable, net $ 61,340,259 $ 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 % 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 thirty-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 December 31, 2022 and 2021, the Company believes that it is compliant with these covenants. (b) The mortgage loan for the Hanover Square Property bore interest at a fixed rate of 4.25 % until January 1, 2023, when the interest rate adjusted to a fixed rate of 6.94 %, which was determined by adding 3.00% 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 %. As a result of the interest rate change, as of February 1, 2023, the fixed monthly payment of $56,882 increased to $78,098 which includes interest at the fixed rate, and principal, based on a twenty-five-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 %. As of December 31, 2022 and 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 % and was interest only for the first twelve months. Beginning on October 1, 2020, the monthly payment became $52,795 for the remaining term of the loan, which includes interest at the fixed rate, and principal, based on a thirty-year amortization schedule. (d) The mortgage loan for the Brookfield Property bears interest at a fixed rate of 3.90 % and was interest only for the first twelve months. Beginning on November 1, 2020, the monthly payment became $22,876 for the remaining term of the loan, which includes interest at the fixed rate, and principal, based on a thirty-year amortization schedule. (e) The mortgage loan for the Parkway Property bears interest at a variable rate based on LIBOR with a minimum rate of 2.25 %. The interest rate payable is the ICE LIBOR rate plus 225 basis points. As of December 31, 2022 and 2021, the rate in effect for the Parkway Property mortgage was 6.3701 % and 2.3493 %, 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 thirty-year amortization schedule. On October 28, 2021, the Company entered into an Interest Rate Protection Transaction to limit its 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% if USD 1-Month ICE LIBOR exceeds 3%. For the period from September 1, 2022 through December 31, 2022, the effective rate for the Parkway Property mortgage exceeded the 5.25% cap, and payments from the Interest Rate Protection Transaction resulted in a net interest expense based on the 5.25% cap rate. Payments to the Company from the Interest Rate Protection Transaction are recorded as an offset to interest expense on the Company’s consolidated statements of operations for the year ended December 31, 2022. No such payments were received during the year ended December 31, 2021 because the interest rate in effect did not exceed the interest rate cap. (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 % for a five-year term. The monthly payment, which includes interest at the fixed rate, and principal, based on a twenty-five-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 % 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 December 31, 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 year ended December 31, 2022, recorded a loss on extinguishment of debt of $113,282 . The original mortgage loan for the Lancer Center Property bore interest at a fixed rate of 4.00 %. 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 year ended December 31, 2022, recorded a loss on extinguishment of debt of $56,393 . 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 % 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. The Company’s mortgages payables, net, associated with assets held for sale, consists of the following: Monthly Interest December 31, Property Payment Rate Maturity 2022 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 % . The interest rate payable was the USD LIBOR one-month rate plus 4.9 %. As of December 31, 2021, the rate in effect for the Clemson Best Western Property mortgage was 7.15 %. 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 year ended December 31, 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 year ended December 31, 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 consolidated statement of operations for the year ended December 31, 2022. No such expenses were recorded during the year ended December 31, 2021. |
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 year ended December 31, 2022 Amortization Interest rate Mortgage of discounts and protection Other Interest capitalized transaction interest Expense issuance costs payments expense Total Franklin Square mortgage $ 511,568 $ 28,372 $ — $ — $ 539,940 Hanover Square mortgage 426,298 12,890 — — 439,188 Ashley Plaza mortgage 419,301 17,430 — — 436,731 Clemson Best Western mortgage 425,109 — — 2,135 427,244 Brookfield Center mortgage 186,270 11,350 — — 197,620 Lancer Center mortgage 115,179 11,928 — — 127,107 Greenbrier Business Center mortgage 81,409 1,155 — — 82,564 Parkway Center mortgage 198,480 11,026 (7,682) — 201,824 Wells Fargo Mortgage Facility 466,545 13,444 — — 479,989 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 222,881 — 400,000 622,881 Total interest expense $ 2,830,159 $ 330,476 $ (7,682) $ 402,135 $ 3,555,088 For the year ended December 31, 2021 Amortization Mortgage of discounts and Other Interest capitalized interest Expense issuance costs expense Total Franklin Square mortgage $ 720,003 $ 9,325 $ — $ 729,328 Hanover Square mortgage 438,931 12,902 — 451,833 Hampton Inn mortgage 456,300 9,000 10,544 475,844 Ashley Plaza mortgage 427,280 17,431 — 444,711 Clemson Best Western mortgage 561,821 22,437 6,688 590,946 Brookfield Center mortgage 189,685 11,352 — 201,037 Lancer Center mortgage 166,026 17,971 — 183,997 Greenbrier Business Center mortgage 63,429 924 — 64,353 Parkway Center mortgage 19,895 1,838 — 21,733 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 204,383 400,000 604,383 Amortization and interest on convertible debentures — 1,718,487 42,486 1,760,973 Other interest — — 5,117 5,117 Total interest expense $ 3,043,370 $ 2,026,050 $ 464,835 $ 5,534,255 |
Schedule of interest accrued and accumulated amortization of capitalized issuance costs | As of December 31, 2022 As of December 31, 2021 Accumulated Accumulated amortization of amortization Accrued capitalized Accrued of capitalized interest issuance costs interest issuance costs Franklin Square mortgage $ 43,448 $ 30,736 $ — $ 2,364 Hanover Square mortgage 38,792 59,880 38,287 46,990 Ashley Plaza mortgage 35,296 58,109 — 40,679 Clemson Best Western mortgage — — 47,716 134,622 Brookfield Center mortgage — 36,893 15,979 25,542 Lancer Center mortgage — — 22,042 17,971 Greenbrier Business Center mortgage — — 15,482 924 Parkway Center mortgage 26,502 12,864 9,966 1,838 Wells Fargo Mortgage Facility — 13,444 — — Amortization and accrued preferred stock dividends (1) on mandatorily redeemable preferred stock 70,004 589,639 70,004 366,758 Total $ 214,042 $ 801,565 $ 219,476 $ 637,688 (1) Recorded as accrued interest under accounts payable and accrued liabilities on the Company’s consolidated balance sheets as of December 31, 2022 and 2021, respectively. |
Schedule of principal repayments on indebtedness | 2023 $ 1,128,774 2024 1,165,548 2025 1,466,596 2026 1,539,696 2027 26,064,473 Thereafter 30,700,764 Total principal payments and debt maturities 62,065,851 Less unamortized issuance costs (725,592) Net principal payments and debt maturities $ 61,340,259 |
Rentals under Operating Leases
Rentals under Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Rentals under Operating Leases | |
Schedule of future minimum rentals to be received under noncancelable tenant operating leases | 2023 $ 7,682,310 2024 6,369,691 2025 5,483,337 2026 3,798,457 2027 2,822,424 Thereafter 7,577,626 Total minimum rents $ 33,733,845 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 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 1.055 500,000 April 1, 2022 325,732 1.075 350,313 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 | Year ended December 31, 2022 2021 Basic and diluted shares outstanding Weighted average Common Shares – basic 17,122,617 13,092,937 Effect of conversion of operating partnership units 213,531 213,531 Weighted average Common Shares – diluted 17,336,148 13,306,468 Calculation of earnings per share – basic and diluted Net loss attributable to common shareholders $ (4,769,241) $ (4,364,264) Weighted average Common Shares – basic and diluted 17,122,617 13,092,937 Loss per share – basic and diluted $ (0.28) $ (0.33) |
Schedule of dividends and distributions to common shareholders and noncontrolling interests | Year ended December 31, 2022 2021 Common shareholders (dividends) $ 1,188,433 $ 642,105 Hampton Inn Property noncontrolling interest (distribution) — 466,258 Hanover Square Property noncontrolling interest (distributions) 57,200 34,400 Parkway Property noncontrolling interest (distributions) 48,600 — Operating Partnership unit holders (distributions) 14,947 8,541 Total dividends and distributions $ 1,309,180 $ 1,151,304 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Information | |
Schedule of property operating revenues, expenses and NOI by product type | For the year ended December 31, Hotel properties Retail center properties Flex center property Total 2022 2021 2022 2021 2022 2021 2022 2021 Revenues $ 1,507,649 $ 4,635,331 $ 7,053,757 $ 5,634,396 $ 2,529,919 $ 1,202,822 $ 11,091,325 $ 11,472,549 Operating expenses 1,335,801 3,102,951 1,912,110 1,518,973 684,843 343,717 3,932,754 4,965,641 Bad debt expense — — 38,401 38,346 8,531 678 46,932 39,024 Net operating income $ 171,848 $ 1,532,380 $ 5,103,246 $ 4,077,077 $ 1,836,545 $ 858,427 $ 7,111,639 $ 6,467,884 |
Organization and Basis of Pre_2
Organization and Basis of Presentation and Consolidations (Details) - ft² | Dec. 31, 2022 | Jun. 13, 2022 | Dec. 31, 2021 | Nov. 01, 2021 | Aug. 27, 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% | 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 | 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% | 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, net (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible Assets, net | ||
Net intangible assets | $ 3,748,706 | $ 4,200,392 |
Intangible Liabilities, net | ||
Below market leases | (2,234,113) | (1,880,612) |
Leasing commissions | ||
Intangible Assets, net | ||
Net intangible assets | 1,135,421 | 1,153,736 |
Legal and marketing costs | ||
Intangible Assets, net | ||
Net intangible assets | 169,437 | 163,019 |
Above market leases | ||
Intangible Assets, net | ||
Net intangible assets | 209,860 | 360,509 |
Net leasehold asset | ||
Intangible Assets, net | ||
Net intangible assets | $ 2,233,988 | $ 2,523,128 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Rental Revenue Related to Above and Below Market Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ (1,325,574) | $ (1,093,565) |
Amortization of below market leases | 415,624 | 274,528 |
Amortization of above and below market leases | 226,721 | 24,024 |
Above market leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ (188,903) | $ (250,504) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Related to Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ (1,325,574) | $ (1,093,565) |
Leasing commissions | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | (246,294) | (208,650) |
Legal and marketing costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | (65,760) | (37,441) |
Net leasehold asset | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ (1,013,520) | $ (847,474) |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Future Amortization of Above and Below Market Leases (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible Assets, net | ||
2023 | $ 1,002,617 | |
2024 | 659,308 | |
2025 | 486,931 | |
2026 | 335,567 | |
2027 | 263,996 | |
2028 - 2042 | 1,000,287 | |
Intangible assets, net | 3,748,706 | $ 4,200,392 |
Intangible Liabilities, net | ||
2023 | (368,802) | |
2024 | (285,892) | |
2025 | (213,348) | |
2026 | (178,776) | |
2027 | 161,866 | |
2028 - 2042 | (1,025,429) | |
Below market leases | (2,234,113) | (1,880,612) |
Leasing commissions | ||
Intangible Assets, net | ||
2023 | 219,221 | |
2024 | 173,352 | |
2025 | 145,550 | |
2026 | 107,312 | |
2027 | 88,394 | |
2028 - 2042 | 401,592 | |
Intangible assets, net | 1,135,421 | 1,153,736 |
Legal and marketing costs | ||
Intangible Assets, net | ||
2023 | 61,506 | |
2024 | 39,837 | |
2025 | 24,004 | |
2026 | 13,160 | |
2027 | 7,917 | |
2028 - 2042 | 23,013 | |
Intangible assets, net | 169,437 | 163,019 |
Above market leases | ||
Intangible Assets, net | ||
2023 | 97,960 | |
2024 | 45,608 | |
2025 | 21,526 | |
2026 | 15,629 | |
2027 | 14,543 | |
2028 - 2042 | 14,594 | |
Intangible assets, net | 209,860 | 360,509 |
Net leasehold asset | ||
Intangible Assets, net | ||
2023 | 623,930 | |
2024 | 400,511 | |
2025 | 295,851 | |
2026 | 199,466 | |
2027 | 153,142 | |
2028 - 2042 | 561,088 | |
Intangible assets, net | $ 2,233,988 | $ 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) | 12 Months Ended | |
Dec. 31, 2022 USD ($) tenant | Dec. 31, 2021 USD ($) | |
Real Estate [Line Items] | ||
Number tenants defaulted | tenant | 2 | |
Loss on impairment - intangible assets | $ 36,670 | $ 0 |
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Sale of Assets and Asset Impairment Charges | |
Loss on impairment | $ 36,670 | 0 |
Impairment of assets held for sale | 175,671 | 0 |
Accumulated amortization of lease origination costs, leases in place and legal and marketing costs | 2,198,049 | 2,779,370 |
Write off of fully amortized intangible assets | 1,901,786 | 667,298 |
Write Off amortization of tenant defaults | $ 5,109 | $ 0 |
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 | 4 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Exceeded the FDIC limit | $ 2,613,789 | $ 2,377,633 |
Security deposits | 267,854 | 222,265 |
Escrow deposits | 579,785 | 1,523,837 |
Capital property reserves | 893,078 | $ 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 ($) | Dec. 31, 2022 | Dec. 31, 2021 |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Capital property reserves | $ 893,078 | $ 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 | 845,765 | 700,000 |
Brookfield Center Property. | Maintenance and leasing cost reserve | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Capital property reserves | $ 47,313 | 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 ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 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 | |
Expenses from stock repurchase plan | $ 8,266 | |
Common stock repurchases | 2,681 | $ 0 |
Additional Paid in Capital | ||
Common stock repurchases | $ 283,862 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Revenue Recognition (Details) | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2022 USD ($) tenant | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | |
Disaggregation of Revenue [Line Items] | |||
Unbilled rent | $ 1,022,153 | $ 872,322 | $ 1,022,153 |
Revenue recognized from the reimbursement of common area maintenance expense | $ 311,116 | 113,493 | |
Number tenants defaulted | tenant | 2 | ||
Loss on impairment - intangible assets | $ 36,670 | 0 | |
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Sale of Assets and Asset Impairment Charges | ||
Impairment of assets held for sale | $ 175,671 | 0 | |
Lease termination fee income recognized | $ 0 | $ 200,000 | |
Franklin Square Property | |||
Disaggregation of Revenue [Line Items] | |||
Number tenants defaulted | tenant | 2 | ||
Loss on impairment - intangible assets | $ 36,670 | $ 0 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |||||
Aug. 31, 2020 shares | Jan. 01, 2020 shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | Dec. 31, 2017 USD ($) Partnership | Nov. 01, 2021 | |
Accounting Policies [Line Items] | ||||||
Allowance for uncollectible tenant receivables | $ 47,109 | $ 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 | $ (4,732,214) | (4,358,282) | ||||
Noncontrolling Operating Partnership Units | Partnership | 125,000 | |||||
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 | |||||
Less: Net (loss) income attributable to Operating Partnership noncontrolling interest | $ (20,072) | 3,903 | ||||
Hampton Inn Property | ||||||
Accounting Policies [Line Items] | ||||||
Amounts incurred for payroll salaries and wages, payroll taxes and other employee benefits | 0 | 622,844 | ||||
Income tax expense | 0 | |||||
Net loss (income) attributable to noncontrolling interests | 14,651 | |||||
Hampton Inn Property | Noncontrolling Interests | ||||||
Accounting Policies [Line Items] | ||||||
Net (loss) income | 14,651 | |||||
Hanover Square Property | ||||||
Accounting Policies [Line Items] | ||||||
Net loss (income) attributable to noncontrolling interests | 38,023 | (8,781) | ||||
Hanover Square Property | Noncontrolling Interests | ||||||
Accounting Policies [Line Items] | ||||||
Net (loss) income | 38,023 | (8,781) | ||||
Clemson Best Western Property | ||||||
Accounting Policies [Line Items] | ||||||
Amounts incurred for payroll salaries and wages, payroll taxes and other employee benefits | 478,774 | 468,897 | ||||
Income tax expense | 0 | 0 | ||||
Accrued Income Taxes | 9,877 | |||||
Parkway Property | ||||||
Accounting Policies [Line Items] | ||||||
Net loss (income) attributable to noncontrolling interests | 19,076 | (3,791) | ||||
Parkway Property | Noncontrolling Interests | ||||||
Accounting Policies [Line Items] | ||||||
Net (loss) income | 19,076 | (3,791) | ||||
Hampton Inn Property | ||||||
Accounting Policies [Line Items] | ||||||
Net (loss) income | 66,595 | |||||
Hanover Square Property | ||||||
Accounting Policies [Line Items] | ||||||
Net (loss) income | 237,651 | (54,888) | ||||
Parkway Property | ||||||
Accounting Policies [Line Items] | ||||||
Net (loss) income | 105,972 | (21,062) | ||||
Operating Partnership | ||||||
Accounting Policies [Line Items] | ||||||
Net (loss) income | (1,651,829) | 214,333 | ||||
Operating Partnership | Noncontrolling Interests | ||||||
Accounting Policies [Line Items] | ||||||
Net (loss) income | $ (20,072) | $ 3,903 | ||||
Percentage of outstanding operating partnership units | 1.19% | 1.31% | ||||
Weighted average of net income (loss) allocated to noncontrolling unit holders | 0.0122 | 0.0182 | ||||
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 | $ 915,107 | |||||
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Revenue from Contract with Customer, Excluding Assessed Tax | |||||
Flex center property tenant reimbursements | ||||||
Accounting Policies [Line Items] | ||||||
Operating lease income | $ 268,592 | |||||
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Revenue from Contract with Customer, Excluding Assessed Tax | |||||
Hampton Inn Property | ||||||
Accounting Policies [Line Items] | ||||||
Ownership percentage by noncontrolling owners | 22% | |||||
Operating Partnership units outstanding | shares | 213,531 | |||||
Hampton Inn Property | Noncontrolling Interests | ||||||
Accounting Policies [Line Items] | ||||||
Net (loss) income | $ 14,651 | |||||
Hanover Square Property | ||||||
Accounting Policies [Line Items] | ||||||
Percentage by parent | 84% | |||||
Ownership percentage by noncontrolling owners | 16% | 16% | ||||
Hanover Square Property | Hanover Square Property | ||||||
Accounting Policies [Line Items] | ||||||
Percentage by parent | 84% | |||||
Ownership percentage by noncontrolling owners | 16% | |||||
Parkway Property | ||||||
Accounting Policies [Line Items] | ||||||
Percentage by parent | 82% | |||||
Ownership percentage by noncontrolling owners | 18% | 18% | ||||
Parkway Property | Noncontrolling Interests | ||||||
Accounting Policies [Line Items] | ||||||
Net (loss) income | $ 19,076 | $ (3,791) | ||||
Parkway Property | Parkway Property | ||||||
Accounting Policies [Line Items] | ||||||
Percentage by parent | 82% | |||||
Ownership percentage by noncontrolling owners | 18% | 18% |
Investment Properties - Investm
Investment Properties - Investment Properties (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Real Estate [Line Items] | ||
Investment properties at cost | $ 85,915,860 | $ 75,896,135 |
Less accumulated depreciation | 9,400,908 | 6,488,220 |
Investment properties, net | 76,514,952 | 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 | $ 64,669,498 | $ 57,322,242 |
Investment Properties - Deferre
Investment Properties - Deferred costs, net of depreciation (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Capitalized leasing commissions, net | $ 555,956 | $ 356,327 |
Capitalized tenant improvements - acquisition cost allocation, net | ||
Capitalized tenant improvements, net | 3,178,534 | 1,840,612 |
Capitalized tenant improvements incurred subsequent to acquisition, net | ||
Capitalized tenant improvements, net | $ 338,836 | $ 257,340 |
Investment Properties - Propert
Investment Properties - Property (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Real Estate [Line Items] | ||
Depreciation expense | $ 3,381,249 | $ 2,415,139 |
Capitalized tenant improvements | 177,373 | 143,079 |
Capitalized leasing commissions | 300,331 | 73,458 |
Depreciation on capitalized leasing commissions | 100,702 | 65,414 |
Impairment of assets held for sale | 175,671 | 0 |
Investment property | ||
Real Estate [Line Items] | ||
Depreciation expense | 3,381,249 | 2,415,139 |
Capitalized tenant improvements incurred subsequent to acquisition, net | ||
Real Estate [Line Items] | ||
Depreciation on capitalized tenant improvements | 95,877 | 65,658 |
Capitalized tenant improvements - acquisition cost allocation, net | ||
Real Estate [Line Items] | ||
Depreciation on capitalized tenant improvements | $ 622,827 | $ 371,714 |
Investment Properties - Additio
Investment Properties - Additional Information (Details) | 12 Months Ended | ||||||
Nov. 01, 2022 USD ($) | Jun. 13, 2022 USD ($) ft² | Nov. 01, 2021 USD ($) ft² | Aug. 27, 2021 USD ($) ft² | May 14, 2021 USD ($) ft² | Dec. 31, 2022 USD ($) ft² | Dec. 31, 2021 USD ($) | |
Real Estate [Line Items] | |||||||
Depreciation expense | $ 3,381,249 | $ 2,415,139 | |||||
Capitalized Tenant Improvements | 177,373 | 143,079 | |||||
Capitalized Leasing Commissions | 300,331 | 73,458 | |||||
Depreciation on capitalized leasing commissions | $ 100,702 | $ 65,414 | |||||
Parkway Property | |||||||
Real Estate [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 18% | 18% | |||||
Noncontrolling ownership percentage | 18% | 18% | |||||
Ownership percentage | 82% | ||||||
Lancer Center Property | |||||||
Real Estate [Line Items] | |||||||
Area of building | ft² | 181,590 | ||||||
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% | ||||||
Greenbrier Business Center Property | |||||||
Real Estate [Line Items] | |||||||
Area of building | ft² | 89,290 | 89,280 | |||||
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 | 79.90% | ||||||
Salisbury Marketplace Property | |||||||
Real Estate [Line Items] | |||||||
Area of building | ft² | 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% | ||||||
Parkway Property | |||||||
Real Estate [Line Items] | |||||||
Area of building | ft² | 64,109 | 64,109 | |||||
Cash from an unaffiliated NCI purchaser | $ 469,492 | ||||||
Net Mortgage Loan | $ 4,989,737 | ||||||
Loan Issuance Costs | $ 110,263 | ||||||
Acquisition Investment Made In Acquired Entity | 7,598,024 | ||||||
Purchase price of property | 7,300,000 | ||||||
Acquisition and closing costs | $ 298,024 | ||||||
Percentage of tenant-in-common ownership interest acquired | 82% | ||||||
Total investment | $ 7,598,024 | ||||||
Cash provided | $ 2,138,795 | ||||||
Percentage of property leased | 100% | ||||||
Parkway Property | Parkway Property | |||||||
Real Estate [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 18% | 18% | |||||
Noncontrolling ownership percentage | 18% | 18% | |||||
Ownership percentage | 82% | ||||||
Salisbury Marketplace Property | Lancer Center Property | |||||||
Real Estate [Line Items] | |||||||
Capitalized loan issuance costs | $ 18,847 | ||||||
Investment property | |||||||
Real Estate [Line Items] | |||||||
Depreciation expense | $ 3,381,249 | $ 2,415,139 |
Investment Properties - Assets
Investment Properties - Assets held for sale and liabilities associated with assets held for sale (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
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 | ||
Impairment of assets held for sale | $ 175,671 | 0 | |
Clemson Best Western Hotel Property | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Impairment of assets held for sale | $ 175,671 | ||
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 ($) | 12 Months Ended | |||
Sep. 29, 2022 | Aug. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
REVENUE | ||||
Total Revenue | $ 11,091,325 | $ 11,472,549 | ||
OPERATING EXPENSES | ||||
Hotel property operating expenses | 1,335,801 | 3,102,951 | ||
Depreciation and amortization | 4,706,823 | 3,508,704 | ||
Total Operating Expenses | 11,694,648 | 10,782,686 | ||
(Loss) gain on disposal of investment properties | (421,096) | 124,641 | ||
Operating (loss) income | (1,413,626) | 814,504 | ||
Interest Expense | 3,555,088 | 5,534,255 | ||
Net Loss from Operations | (4,968,714) | (4,719,751) | ||
Net Loss | (4,732,214) | (4,358,282) | ||
Net income (loss) attributable to Operating Partnership noncontrolling interests | (20,072) | 3,903 | ||
Net Loss Attributable to Medalist Common Shareholders | (4,769,241) | (4,364,264) | ||
Clemson Best Western Hotel Property and Hampton Inn Property | ||||
REVENUE | ||||
Total Revenue | 1,507,649 | 4,635,331 | ||
OPERATING EXPENSES | ||||
Hotel property operating expenses | 1,335,801 | 3,102,951 | ||
Total Operating Expenses | 1,335,801 | 3,102,951 | ||
(Loss) gain on disposal of investment properties | (421,096) | 124,641 | ||
Operating (loss) income | (249,248) | 1,657,021 | ||
Interest Expense | 427,244 | 1,066,790 | ||
Net Loss from Operations | (676,492) | 590,231 | ||
Other income (expense) | (48) | (166) | ||
Net Loss | (676,540) | 590,065 | ||
Net income (loss) attributable to Operating Partnership noncontrolling interests | (12,827) | 13,898 | ||
Net Loss Attributable to Medalist Common Shareholders | (663,713) | 561,516 | ||
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 | 421,096 | |||
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 | |||
Interest Expense | 475,844 | |||
Net loss (income) attributable to noncontrolling interests | 14,651 | |||
Hotel property room revenues | ||||
REVENUE | ||||
Total Revenue | 1,494,836 | 4,590,372 | ||
Hotel property room revenues | Clemson Best Western Hotel Property and Hampton Inn Property | ||||
REVENUE | ||||
Total Revenue | 1,494,836 | 4,590,372 | ||
Hotel property other revenues | ||||
REVENUE | ||||
Total Revenue | 12,813 | 44,959 | ||
Hotel property other revenues | Clemson Best Western Hotel Property and Hampton Inn Property | ||||
REVENUE | ||||
Total Revenue | $ 12,813 | $ 44,959 |
Investment Properties - 2022 Ac
Investment Properties - 2022 Acquisition (Details) - USD ($) | Jun. 13, 2022 | Dec. 31, 2022 | Dec. 31, 2021 |
Real Estate [Line Items] | |||
Investment property | $ 76,514,952 | $ 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 ($) | 12 Months Ended | ||||
Nov. 01, 2021 | Aug. 27, 2021 | May 14, 2021 | Dec. 31, 2021 | Dec. 31, 2022 | |
Real Estate [Line Items] | |||||
Investment property | $ 69,407,915 | $ 76,514,952 | |||
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, Greenbrier Business Center and Parkway Properties | |||||
Real Estate [Line Items] | |||||
Investment property | 24,076,715 | ||||
Lease intangibles and other assets | 2,079,981 | ||||
Restricted cash acquired | 150,000 | ||||
Above market leases | 208,118 | ||||
Below market leases | (1,132,643) | ||||
Fair value of net assets acquired | 25,382,171 | ||||
Purchase consideration: | |||||
Consideration paid with cash | 9,019,472 | ||||
Consideration paid by noncontrolling owner | 469,492 | ||||
Consideration paid with new mortgage debt, net | 11,411,607 | ||||
Consideration paid with assumed mortgage debt, net | 4,481,600 | ||||
Total consideration | $ 25,382,171 | ||||
Parkway Property | |||||
Real Estate [Line Items] | |||||
Investment property | $ 7,277,036 | ||||
Lease intangibles and other assets | 472,288 | ||||
Above market leases | 2,494 | ||||
Below market leases | (153,794) | ||||
Fair value of net assets acquired | 7,598,024 | ||||
Purchase consideration: | |||||
Consideration paid with cash | 2,138,795 | ||||
Consideration paid by noncontrolling owner | 469,492 | ||||
Consideration paid with new mortgage debt, net | 4,989,737 | ||||
Total consideration | $ 7,598,024 |
Mandatorily Redeemable Prefer_3
Mandatorily Redeemable Preferred Stock (Details) | 12 Months Ended | ||||||||||||||||||||
Jan. 27, 2023 $ / shares | 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 | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Apr. 01, 2022 $ / shares | Mar. 21, 2022 $ / shares | Mar. 17, 2022 $ / shares | Mar. 14, 2022 $ / shares | Mar. 03, 2022 $ / shares | Apr. 13, 2021 $ / shares | |
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | |||||||||||||||||||||
Price Per Share | $ / shares | $ 1.075 | $ 1.055 | $ 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 | $ 0.50 | $ 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 | ||||||||||||||||||||
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 | |||||||||||||||||||
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 | 222,881 | 204,383 | |||||||||||||||||||
Accumulated amortization of the discount and deferred financing costs | $ 589,639 | $ 366,758 |
Loans Payable - Mortgages Payab
Loans Payable - Mortgages Payables, Net (Details) - USD ($) | 12 Months Ended | |||||
Feb. 01, 2023 | Jan. 31, 2023 | Jun. 13, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2023 | |
Mortgages Payable | ||||||
Loans Payable | ||||||
Less unamortized issuance costs | $ (725,592) | $ (825,544) | ||||
Net principal payments and debt maturities | $ 61,340,259 | $ 54,517,822 | ||||
Franklin Square Property | Mortgages Payable | ||||||
Loans Payable | ||||||
Monthly Payment | Interest only | |||||
Interest Rate | 3.808% | |||||
Maturity | 2031-12 | 2031-12 | ||||
Mortgages payable | $ 13,250,000 | $ 13,250,000 | ||||
Hanover Square Property | Mortgages Payable | ||||||
Loans Payable | ||||||
Monthly Payment | $ 78,098 | $ 56,882 | $ 56,882 | |||
Interest Rate | 4.25% | 6.94% | ||||
Maturity | 2027-12 | 2027-12 | ||||
Mortgages payable | $ 9,877,867 | $ 10,134,667 | ||||
Ashley Plaza Property | Mortgages Payable | ||||||
Loans Payable | ||||||
Monthly Payment | $ 52,795 | |||||
Interest Rate | 3.75% | |||||
Maturity | 2029-09 | 2029-09 | ||||
Mortgages payable | $ 10,930,370 | $ 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% | |||||
Maturity | 2029-11 | 2029-11 | ||||
Mortgages payable | $ 4,663,206 | $ 4,758,344 | ||||
Parkway Property | ||||||
Loans Payable | ||||||
Maturity | 2026-10 | 2026-10 | ||||
Parkway Property | Mortgages Payable | ||||||
Loans Payable | ||||||
Monthly Payment | $ 19,720 | |||||
Mortgages payable | $ 4,992,427 | $ 5,090,210 | ||||
Wells Fargo Facility | Mortgages Payable | ||||||
Loans Payable | ||||||
Monthly Payment | 103,438 | |||||
Monthly Payment | $ 103,438 | |||||
Interest Rate | 4.50% | 4.50% | ||||
Maturity | 2027-06 | 2027-06 | ||||
Mortgages payable | $ 18,351,981 | |||||
Lancer Center Property | Mortgages Payable | ||||||
Loans Payable | ||||||
Monthly Payment | $ 34,667 | |||||
Interest Rate | 4% | |||||
Mortgages payable | $ 6,488,034 | |||||
Greenbrier Business Center Property | Mortgages Payable | ||||||
Loans Payable | ||||||
Monthly Payment | $ 23,873 | |||||
Interest Rate | 4% | |||||
Mortgages payable | $ 4,495,000 |
Loans Payable - Assets held for
Loans Payable - Assets held for sale (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 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] | ||
Less unamortized issuance costs | (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 | 12 Months Ended | ||||
Jan. 05, 2021 | Dec. 22, 2020 | Oct. 27, 2020 | Jan. 05, 2021 | Dec. 31, 2022 | Dec. 31, 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) | $ (250,000) | |||
Debt Issuance Costs - Cash | (518,517) | (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 | Dec. 31, 2022 |
Loans Payable | ||
Line of credit, maximum borrowing capacity | $ 1,500,000 | |
Line of credit, outstanding balance | $ 0 | |
Basis spread on variable rate | 2.25% | |
Term of loan | 1 year | |
SOFR | ||
Loans Payable | ||
Interest Rate | 4.30% |
Loans Payable - Convertible (De
Loans Payable - Convertible (Details) | 2 Months Ended | 12 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 ($) | Jan. 05, 2021 USD ($) | Dec. 31, 2022 USD ($) D $ / shares | Dec. 31, 2021 USD ($) | |
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) | $ (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 ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | $ 2,830,159 | $ 3,043,370 |
Amortization of discounts and capitalized issuance costs | 330,476 | 2,026,050 |
Interest rate protection transaction payments | (7,682) | 464,835 |
Other interest expense | 402,135 | 5,534,255 |
Total interest expense | 3,555,088 | 5,534,255 |
Amortization and preferred stock dividends on mandatorily redeemable preferred stock | ||
Debt Instrument [Line Items] | ||
Amortization of discounts and capitalized issuance costs | 222,881 | 204,383 |
Other interest expense | 400,000 | 400,000 |
Total interest expense | 622,881 | 604,383 |
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 | 5,117 | |
Total interest expense | 5,117 | |
Franklin Square Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 511,568 | 720,003 |
Amortization of discounts and capitalized issuance costs | 28,372 | 9,325 |
Total interest expense | 539,940 | 729,328 |
Hanover Square Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 426,298 | 438,931 |
Amortization of discounts and capitalized issuance costs | 12,890 | 12,902 |
Total interest expense | 439,188 | 451,833 |
Hampton Inn Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 456,300 | |
Amortization of discounts and capitalized issuance costs | 9,000 | |
Other interest expense | 10,544 | |
Total interest expense | 475,844 | |
Ashley Plaza Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 419,301 | 427,280 |
Amortization of discounts and capitalized issuance costs | 17,430 | 17,431 |
Total interest expense | 436,731 | 444,711 |
Clemson Best Western Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 425,109 | 561,821 |
Amortization of discounts and capitalized issuance costs | 22,437 | |
Other interest expense | 2,135 | 6,688 |
Total interest expense | 427,244 | 590,946 |
Brookfield Center Property. | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 186,270 | 189,685 |
Amortization of discounts and capitalized issuance costs | 11,350 | 11,352 |
Total interest expense | 197,620 | 201,037 |
Lancer Centers Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 115,179 | 166,026 |
Amortization of discounts and capitalized issuance costs | 11,928 | 17,971 |
Total interest expense | 127,107 | 183,997 |
Greenbrier Business Center Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 81,409 | 63,429 |
Amortization of discounts and capitalized issuance costs | 1,155 | 924 |
Total interest expense | 82,564 | 64,353 |
Parkway Center | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 198,480 | 19,895 |
Amortization of discounts and capitalized issuance costs | 11,026 | 1,838 |
Interest rate protection transaction payments | (7,682) | |
Total interest expense | 201,824 | $ 21,733 |
Wells Fargo Facility | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 466,545 | |
Amortization of discounts and capitalized issuance costs | 13,444 | |
Total interest expense | $ 479,989 |
Loans Payable - Interest accrue
Loans Payable - Interest accrued and accumulated amortization of capitalized issuance costs (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Accrued interest | $ 214,042 | $ 219,476 |
Accumulated amortization of capitalized issuance costs | 801,565 | 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 | 589,639 | 366,758 |
Franklin Square Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 43,448 | |
Accumulated amortization of capitalized issuance costs | 30,736 | 2,364 |
Hanover Square Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 38,792 | 38,287 |
Accumulated amortization of capitalized issuance costs | 59,880 | 46,990 |
Ashley Plaza Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 35,296 | |
Accumulated amortization of capitalized issuance costs | 58,109 | 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 | 36,893 | 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 | 26,502 | 9,966 |
Accumulated amortization of capitalized issuance costs | 12,864 | $ 1,838 |
Wells Fargo Facility | ||
Debt Instrument [Line Items] | ||
Accumulated amortization of capitalized issuance costs | $ 13,444 |
Loans Payable - Principal Repay
Loans Payable - Principal Repayments on Indebtedness (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Mortgages Payable | ||
Debt Instrument [Line Items] | ||
2023 | $ 1,128,774 | |
2024 | 1,165,548 | |
2025 | 1,466,596 | |
2026 | 1,539,696 | |
2027 | 26,064,473 | |
Thereafter | 30,700,764 | |
Total principal payments and debt maturities | 62,065,851 | |
Less unamortized issuance costs | (725,592) | $ (825,544) |
Net principal payments and debt maturities | $ 61,340,259 | 54,517,822 |
Mortgages payable, net, associated with assets held for sale | ||
Debt Instrument [Line Items] | ||
Less unamortized issuance costs | $ (134,632) |
Loans Payable - Additional Info
Loans Payable - Additional Information (Details) | 2 Months Ended | 12 Months Ended | |||||||||||
Feb. 01, 2023 USD ($) | Jan. 31, 2023 USD ($) | Jan. 01, 2023 | Jun. 13, 2022 USD ($) | Nov. 08, 2021 USD ($) | Oct. 28, 2021 | Mar. 31, 2021 | Oct. 27, 2020 USD ($) | Jan. 05, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | 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 | $ 3,922,136 | $ 4,370,405 | |||||||||||
Number of conversations | item | 17 | 17 | |||||||||||
Escrows fund | 579,785 | 1,523,837 | |||||||||||
Loss on extinguishment of debt | (389,207) | ||||||||||||
Fees paid | 84,900 | ||||||||||||
Mortgages Payable | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Mortgages payables | 61,340,259 | 54,517,822 | |||||||||||
Unamortized issuance costs, net | $ 725,592 | 825,544 | |||||||||||
Mortgages payable, net, associated with assets held for sale | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Unamortized issuance costs, net | 134,632 | ||||||||||||
Wells Fargo Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Basis spread on variable rate | 2.25% | ||||||||||||
Term of loan | 1 year | ||||||||||||
Wells Fargo Line of Credit | Secured Overnight Financing Rate (SOFR) | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest Rate | 4.30% | ||||||||||||
Parkway Property | Interest Rate Protection Transaction | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate exposure cap | 5.25% | ||||||||||||
Description of interest rate | capped at 5.25% if USD 1-Month ICE LIBOR exceeds 3% | ||||||||||||
Fair value of derivative | $ 258,279 | $ 37,350 | |||||||||||
Parkway Property | Interest Rate Protection Transaction | ICE LIBOR | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Description of interest rate | 4.392 | 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% | ||||||||||||
Term of loan | 10 years | ||||||||||||
Refinance with new mortgage payable | $ 13,250,000 | $ 13,250,000 | |||||||||||
Net worth to be maintained by the entity (excluding mortgaged property's assets and liabilities) | 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 | ||||||||||||
Franklin Square Property | Mortgages Payable | Monthly payments till January 6, 2025 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest Rate | 3.808% | ||||||||||||
Fixed monthly payment including principal and interest | $ 61,800 | ||||||||||||
Hanover Square Property | Mortgages Payable | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest Rate | 6.94% | 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 | $ 9,877,867 | 10,134,667 | |||||||||||
Fixed monthly payment including principal and interest | $ 78,098 | $ 56,882 | $ 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% | ||||||||||||
Refinance with new mortgage payable | $ 10,930,370 | 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 | |||||||||||
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% | ||||||||||||
Effective interest rate | 7.15% | ||||||||||||
Refinance with new mortgage payable | $ 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% | ||||||||||||
Refinance with new mortgage payable | 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 | $ 113,282 | ||||||||||||
Brookfield Center Property. | Mortgages Payable | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest Rate | 3.90% | ||||||||||||
Refinance with new mortgage payable | $ 4,663,206 | 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% | ||||||||||||
Refinance with new mortgage payable | $ 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 | $ 56,393 | ||||||||||||
Parkway Property | Interest Rate Protection Transaction | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest rate exposure cap | 5.25% | ||||||||||||
Description of interest rate | capped at 5.25% if USD 1-Month ICE LIBOR exceeds 3%. | ||||||||||||
Parkway Property | Mortgages Payable | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Effective interest rate | 6.3701% | 2.3493% | |||||||||||
Refinance with new mortgage payable | $ 4,992,427 | $ 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% | ||||||||||||
Wells Fargo Facility | Mortgages Payable | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maturity period | 5 years | ||||||||||||
Interest Rate | 4.50% | 4.50% | |||||||||||
Refinance with new mortgage payable | $ 18,351,981 | ||||||||||||
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 | $ 250,000 | |||||||||||
Debt Issuance Costs | 518,517 | 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) | Dec. 31, 2022 USD ($) |
Future minimum rents to be received under operating leases | |
2023 | $ 7,682,310 |
2024 | 6,369,691 |
2025 | 5,483,337 |
2026 | 3,798,457 |
2027 | 2,822,424 |
Thereafter | 7,577,626 |
Total minimum rents | $ 33,733,845 |
Equity - Standby Equity Purchas
Equity - Standby Equity Purchase Agreement (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Apr. 01, 2022 | Mar. 21, 2022 | Mar. 17, 2022 | Mar. 14, 2022 | Mar. 03, 2022 | Apr. 13, 2021 | Apr. 01, 2022 | Dec. 31, 2022 | |
Equity | ||||||||
Total Proceeds | $ 350,313 | $ 500,000 | $ 300,000 | $ 290,000 | $ 98,574 | $ 10,886,337 | $ 1,538,887 | $ 1,538,887 |
Price Per Share | $ 1.075 | $ 1.055 | $ 1.076 | $ 1.050 | $ 1.088 | $ 1.50 | $ 1.075 | |
Common stock issuances (shares) | 325,732 | 474,068 | 278,810 | 276,190 | 90,600 | 8,000,000 | 1,445,400 | 1,445,400 |
Equity - Common Stock Repurchas
Equity - Common Stock Repurchase Plan (Details) - USD ($) | 1 Months Ended | 12 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 | Dec. 31, 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 ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Basic and diluted shares outstanding | ||
Weighted average Common Shares - basic | 17,122,617 | 13,092,937 |
Effect of conversion of operating partnership units | 213,531 | 213,531 |
Weighted average common shares - diluted | 17,336,148 | 13,306,468 |
Calculation of earnings per share - basic and diluted | ||
Net loss attributable to common shareholders | $ (4,769,241) | $ (4,364,264) |
Weighted-average number of shares - basic | 17,122,617 | 13,092,937 |
Weighted-average number of shares - diluted | 17,122,617 | 13,092,937 |
Loss per share from operations - basic | $ (0.28) | $ (0.33) |
Loss per share from operations - diluted | $ (0.28) | $ (0.33) |
Equity - Dividends and Distribu
Equity - Dividends and Distributions to Noncontrolling Interests Paid (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Equity [Line Items] | ||
Common shareholders (dividends) | $ 1,188,433 | $ 642,105 |
Total dividends and distributions | 1,309,180 | 1,151,304 |
Hampton Inn Property | ||
Equity [Line Items] | ||
Noncontrolling interest (distributions) | 466,258 | |
Hanover Square Property | ||
Equity [Line Items] | ||
Noncontrolling interest (distributions) | 57,200 | 34,400 |
Parkway Property | ||
Equity [Line Items] | ||
Noncontrolling interest (distributions) | 48,600 | |
Operating Partnership unit holders (distributions) | ||
Equity [Line Items] | ||
Noncontrolling interest (distributions) | $ 14,947 | $ 8,541 |
Equity - 2018 Equity Incentive
Equity - 2018 Equity Incentive Plan (Details) - 2018 Equity Incentive Plan | Nov. 22, 2022 USD ($) employee item director shares | Mar. 02, 2022 USD ($) director employee shares | Mar. 16, 2021 USD ($) director shares | Aug. 23, 2018 shares | Jan. 01, 2023 shares | Dec. 31, 2022 |
Equity [Line Items] | ||||||
Number of shares available for issuance under the plan | 491,304 | |||||
Percentage of fully diluted shares of common shares | 8% | |||||
Fair value of grants | $ | $ 250,000 | $ 233,100 | $ 149,981 | |||
Consultants | ||||||
Equity [Line Items] | ||||||
Number of shares granted | 50,956 | |||||
Number of consultants | item | 2 | |||||
Minimum | ||||||
Equity [Line Items] | ||||||
Number of shares authorized | 240,000 | |||||
Independent directors | ||||||
Equity [Line Items] | ||||||
Number of shares granted | 114,651 | 90,000 | 40,356 | |||
Number of directors who received grants | director | 3 | 3 | 3 | |||
Employee | ||||||
Equity [Line Items] | ||||||
Number of shares granted | 76,434 | 60,000 | ||||
Number of employees of the Manager who also serve as directors who received grants | employee | 2 | 2 | ||||
Chief financial officer | ||||||
Equity [Line Items] | ||||||
Number of shares granted | 76,433 | 60,000 | 26,900 | |||
Percent incremental common shares reserved | 8% |
Equity - Additional Information
Equity - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||
Oct. 20, 2022 $ / shares | Jul. 20, 2022 $ / shares | Apr. 21, 2022 $ / shares | Apr. 01, 2022 USD ($) $ / shares shares | Mar. 21, 2022 USD ($) $ / shares shares | Mar. 17, 2022 USD ($) $ / shares shares | Mar. 14, 2022 USD ($) $ / shares shares | Mar. 03, 2022 USD ($) $ / shares shares | Jan. 20, 2022 $ / shares | Nov. 17, 2021 USD ($) | Apr. 13, 2021 USD ($) $ / shares shares | Apr. 01, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Oct. 27, 2021 $ / shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Equity [Line Items] | ||||||||||||||||
Shares authorized | 1,000,000,000 | |||||||||||||||
Common stock, shares authorized | 750,000,000 | |||||||||||||||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||||
Preferred stock, shares authorized | 250,000,000 | |||||||||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 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 | 1,445,400 | ||||||||
Sales price per share | $ / shares | $ 1.075 | $ 1.055 | $ 1.076 | $ 1.050 | $ 1.088 | $ 1.50 | $ 1.075 | |||||||||
Average share price | $ / shares | $ 1.065 | $ 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 | $ 1,538,887 | ||||||||
Authorized aggregate amount of common stock under shelf registration | $ | 150,000,000 | |||||||||||||||
Legal costs and filing fees associated with filling of shelf registration statement | $ | $ 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 | $ / shares | $ 4.80 | |||||||||||||||
Common stock, shares, outstanding | 16,052,617 | 17,758,421 | 16,052,617 | |||||||||||||
Dividend paid | $ | $ 1,309,180 | $ 1,151,304 | ||||||||||||||
Dividends paid per common share | $ / shares | $ 0.01 | $ 0.02 | $ 0.02 | $ 0.02 | $ 0.02 | $ 0.07 | $ 0.04 | |||||||||
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 | 17,971,952 | 16,266,148 | |||||||||||||
Dividend paid | $ | $ 14,947 | $ 8,541 | ||||||||||||||
General Partner | Noncontrolling Interest Operating Partnership | ||||||||||||||||
Equity [Line Items] | ||||||||||||||||
Common units outstanding | 16,052,617 | 17,758,421 | 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 | 17,758,421 | 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 | ||||||||||||||
Operating Partnership unit holders (distributions) | Noncontrolling Limited Partner | Noncontrolling Interest Operating Partnership | ||||||||||||||||
Equity [Line Items] | ||||||||||||||||
Common units outstanding | 213,531 | 213,531 | 213,531 | |||||||||||||
Common unit to common share conversion ratio | 1 | |||||||||||||||
Operating Partnership | General Partner | ||||||||||||||||
Equity [Line Items] | ||||||||||||||||
Operating Partnership ownership interest | 98.81% | 98.69% | ||||||||||||||
Operating Partnership | Noncontrolling Limited Partner | ||||||||||||||||
Equity [Line Items] | ||||||||||||||||
Common unit to common share conversion ratio | 1 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Other Commitments [Line Items] | |
Percentage of total annualized base revenues of properties in the Mid-Atlantic | 100% |
Minimum | |
Other Commitments [Line Items] | |
Lease extension term | 1 year |
Maximum | |
Other Commitments [Line Items] | |
Lease extension term | 3 years |
Related Party Transactions - Me
Related Party Transactions - Medalist Fund Manager Inc (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Amounts payable to Manager | ||
Retail center property operating expenses | $ 1,912,110 | $ 1,518,973 |
Flex center property operating expenses | 684,843 | 343,717 |
Hotel property operating expenses | 1,335,801 | 3,102,951 |
Legal, accounting and other professional fees | 1,627,881 | 1,465,199 |
Asset management fees | ||
Amounts payable to Manager | ||
Retail center property operating expenses | 309,078 | 258,628 |
Flex center property operating expenses | 109,100 | 50,300 |
Hotel property operating expenses | 20,475 | 96,868 |
Legal, accounting and other professional fees | $ 437,396 | 411,233 |
Asset management fees | Medalist Fund Manager, Inc. | ||
Amounts payable to Manager | ||
Asset management fee percentage | 0.125% | |
Asset management fees incurred | $ 876,049 | 817,029 |
Acquisition fees | Medalist Fund Manager, Inc. | ||
Amounts payable to Manager | ||
Percentage Of Acquisition Fee | 2% | |
Acquisition fee accrued | $ 352,717 | 251,955 |
Acquisition fees | Medalist Fund Manager, Inc. | Salisbury Marketplace Property | ||
Amounts payable to Manager | ||
Acquisition and closing costs | 201,524 | |
Cash payment of acquisition fee | 100,762 | |
Acquisition fee accrued | 100,762 | |
Acquisition fees | Medalist Fund Manager, Inc. | Lancer Center Property, Greenbrier Business Center Property and Parkway Property [Member] | ||
Amounts payable to Manager | ||
Acquisition and closing costs | 503,910 | |
Cash payment of acquisition fee | 251,955 | |
Acquisition fee accrued | 251,955 | |
Incentive fees | Medalist Fund Manager, Inc. | ||
Amounts payable to Manager | ||
Incentive fee expenses | $ 0 | $ 0 |
Related Party Transactions - Ot
Related Party Transactions - Other Related Parties (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
One of the Medalist Fund Manager, Inc. owners | Shockoe Properties, LLC | |||
Related Party Transaction [Line Items] | |||
Ownership percentage by noncontrolling owners | 6.32% | ||
Property management fees | Shockoe Properties, LLC | |||
Related Party Transaction [Line Items] | |||
Property management fees | $ 271,334 | $ 200,216 | |
Percentage of rent | 3% | ||
Threshold limit of percentage of asset management fee | up to 3% of the monthly gross revenues | ||
Consulting Agreement | Gunston Consulting, LLC | |||
Related Party Transaction [Line Items] | |||
Annual salary | $ 150,000 | ||
Consulting fees paid | $ 114,516 | $ 0 | |
Equity Incentive Plan shares granted | 38,217 |
Segment Information - Property
Segment Information - Property Operating Revenues, Expenses and NOI by Product Type (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 11,091,325 | $ 11,472,549 |
Operating expenses | 11,694,648 | 10,782,686 |
Bad debt expense | 46,932 | 39,024 |
Net operating income | (1,413,626) | 814,504 |
Operating segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 11,091,325,000 | 11,472,549,000 |
Operating expenses | 3,932,754,000 | 4,965,641,000 |
Bad debt expense | 46,932,000 | 39,024,000 |
Net operating income | 7,111,639,000 | 6,467,884,000 |
Operating segments | Hotel properties. | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,507,649,000 | 4,635,331,000 |
Operating expenses | 1,335,801,000 | 3,102,951,000 |
Net operating income | 171,848,000 | 1,532,380,000 |
Operating segments | Retail center properties | ||
Segment Reporting Information [Line Items] | ||
Revenues | 7,053,757,000 | 5,634,396,000 |
Operating expenses | 1,912,110,000 | 1,518,973,000 |
Bad debt expense | 38,401,000 | 38,346,000 |
Net operating income | 5,103,246,000 | 4,077,077,000 |
Operating segments | Flex center property | ||
Segment Reporting Information [Line Items] | ||
Revenues | 2,529,919,000 | 1,202,822,000 |
Operating expenses | 684,843,000 | 343,717,000 |
Bad debt expense | 8,531,000 | 678,000 |
Net operating income | $ 1,836,545,000 | $ 858,427,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||||||||||||||
Jan. 27, 2023 | Oct. 20, 2022 | Jul. 21, 2022 | Jul. 20, 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 | Oct. 27, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | ||||||||||||||||
Common stock dividend paid | $ 0.01 | $ 0.02 | $ 0.02 | $ 0.02 | $ 0.02 | $ 0.07 | $ 0.04 | |||||||||
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 | $ 0.50 | $ 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 |
Schedule III - Real Estate Pr_2
Schedule III - Real Estate Properties and Accumulated Depreciation - Real Estate Properties (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Initial Cost to Company | |||
Costs Written Off Due to Impairment and Loss on Dispositions | $ (175,671) | ||
Gross Amount at Which Carried at Close of Period | |||
Total | 85,915,860 | $ 86,464,643 | $ 75,967,825 |
Accumulated Depreciation | 9,400,908 | 7,210,520 | 6,501,713 |
Franklin Square Property | |||
Gross Amount at Which Carried at Close of Period | |||
Total | 19,194,564 | 19,220,574 | 19,251,826 |
Accumulated Depreciation | 3,115,826 | 2,686,982 | 2,181,039 |
Hanover Square Property | |||
Gross Amount at Which Carried at Close of Period | |||
Total | 11,464,185 | 11,683,302 | 11,617,856 |
Accumulated Depreciation | 1,261,870 | 1,226,885 | 909,211 |
Hampton Inn Property | |||
Gross Amount at Which Carried at Close of Period | |||
Total | 13,972,091 | ||
Accumulated Depreciation | 1,561,841 | ||
Ashley Plaza Property | |||
Gross Amount at Which Carried at Close of Period | |||
Total | 14,358,787 | 14,296,145 | 14,282,764 |
Accumulated Depreciation | 2,024,945 | 1,411,023 | 808,059 |
Lancer Center Shopping Center | |||
Gross Amount at Which Carried at Close of Period | |||
Total | 10,123,987 | 10,071,797 | |
Accumulated Depreciation | 1,198,668 | 455,898 | |
Clemson Best Western University Inn | |||
Initial Cost to Company | |||
Costs Written Off Due to Impairment and Loss on Dispositions | (175,671) | ||
Gross Amount at Which Carried at Close of Period | |||
Total | 10,568,508 | 10,405,855 | |
Accumulated Depreciation | 722,300 | 722,300 | |
Greenbrier Business Center Property | |||
Gross Amount at Which Carried at Close of Period | |||
Total | 6,939,193 | 6,898,842 | |
Accumulated Depreciation | 341,562 | 86,014 | |
Brookfield Center Property. | |||
Gross Amount at Which Carried at Close of Period | |||
Total | 6,552,959 | 6,445,169 | 6,437,433 |
Accumulated Depreciation | 847,914 | 579,739 | $ 319,263 |
Parkway Center | |||
Gross Amount at Which Carried at Close of Period | |||
Total | 7,303,857 | 7,280,306 | |
Accumulated Depreciation | $ 289,623 | 41,679 | |
Retail properties | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | 34,058,237 | ||
Initial Cost to Company | |||
Land | 14,088,773 | ||
Building and site improvements | 50,207,571 | ||
Costs Capitalized Subsequent to Acquisition | 1,747,160 | ||
Costs Written Off Due to Impairment and Loss on Dispositions | (321,162) | ||
Gross Amount at Which Carried at Close of Period | |||
Fully Amortized Improvements | (602,491) | ||
Land | 14,088,773 | ||
Buildings and Improvements | 51,031,078 | ||
Total | 65,119,851 | ||
Accumulated Depreciation | 7,921,809 | ||
Retail properties | Franklin Square Property | North Carolina | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | 13,250,000 | ||
Initial Cost to Company | |||
Land | 3,343,164 | ||
Building and site improvements | 15,418,158 | ||
Costs Capitalized Subsequent to Acquisition | 1,033,712 | ||
Costs Written Off Due to Impairment and Loss on Dispositions | (309,435) | ||
Gross Amount at Which Carried at Close of Period | |||
Fully Amortized Improvements | (291,035) | ||
Land | 3,343,164 | ||
Buildings and Improvements | 15,851,400 | ||
Total | 19,194,564 | ||
Accumulated Depreciation | $ 3,115,825 | ||
Retail properties | Franklin Square Property | North Carolina | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 38 years | ||
Retail properties | Franklin Square Property | North Carolina | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 13 years | ||
Retail properties | Hanover Square Property | Virginia | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | $ 9,877,867 | ||
Initial Cost to Company | |||
Land | 3,158,882 | ||
Building and site improvements | 8,334,478 | ||
Costs Capitalized Subsequent to Acquisition | 276,148 | ||
Gross Amount at Which Carried at Close of Period | |||
Fully Amortized Improvements | (305,324) | ||
Land | 3,158,882 | ||
Buildings and Improvements | 8,305,302 | ||
Total | 11,464,184 | ||
Accumulated Depreciation | $ 1,261,870 | ||
Retail properties | Hanover Square Property | Virginia | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 39 years | ||
Retail properties | Hanover Square Property | Virginia | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 12 years | ||
Retail properties | Ashley Plaza Property | North Carolina | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | $ 10,930,370 | ||
Initial Cost to Company | |||
Land | 3,007,721 | ||
Building and site improvements | 11,191,307 | ||
Costs Capitalized Subsequent to Acquisition | 165,891 | ||
Gross Amount at Which Carried at Close of Period | |||
Fully Amortized Improvements | (6,132) | ||
Land | 3,007,721 | ||
Buildings and Improvements | 11,351,066 | ||
Total | 14,358,787 | ||
Accumulated Depreciation | $ 2,024,945 | ||
Retail properties | Ashley Plaza Property | North Carolina | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 26 years 8 months 12 days | ||
Retail properties | Ashley Plaza Property | North Carolina | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 5 years | ||
Retail properties | Lancer Center Shopping Center | South Carolina | |||
Initial Cost to Company | |||
Land | $ 2,195,125 | ||
Building and site improvements | 7,684,251 | ||
Costs Capitalized Subsequent to Acquisition | 256,338 | ||
Costs Written Off Due to Impairment and Loss on Dispositions | (11,727) | ||
Gross Amount at Which Carried at Close of Period | |||
Land | 2,195,125 | ||
Buildings and Improvements | 7,928,862 | ||
Total | 10,123,987 | ||
Accumulated Depreciation | $ 1,198,668 | ||
Retail properties | Lancer Center Shopping Center | South Carolina | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 14 years 2 months 12 days | ||
Retail properties | Lancer Center Shopping Center | South Carolina | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 7 years 6 months | ||
Retail properties | Salisbury Shopping Center | North Carolina | |||
Initial Cost to Company | |||
Land | $ 2,383,881 | ||
Building and site improvements | 7,579,377 | ||
Costs Capitalized Subsequent to Acquisition | 15,071 | ||
Gross Amount at Which Carried at Close of Period | |||
Land | 2,383,881 | ||
Buildings and Improvements | 7,594,448 | ||
Total | 9,978,329 | ||
Accumulated Depreciation | $ 320,501 | ||
Retail properties | Salisbury Shopping Center | North Carolina | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 25 years | ||
Retail properties | Salisbury Shopping Center | North Carolina | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 5 years | ||
Flex center property | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | $ 9,655,633 | ||
Initial Cost to Company | |||
Land | 2,437,663 | ||
Building and site improvements | 18,143,543 | ||
Costs Capitalized Subsequent to Acquisition | 233,414 | ||
Costs Written Off Due to Impairment and Loss on Dispositions | (6,369) | ||
Gross Amount at Which Carried at Close of Period | |||
Fully Amortized Improvements | (12,242) | ||
Land | 2,437,663 | ||
Buildings and Improvements | 18,358,346 | ||
Total | 20,796,009 | ||
Accumulated Depreciation | 1,479,099 | ||
Flex center property | Greenbrier Business Center Property | Virginia | |||
Initial Cost to Company | |||
Land | 1,292,894 | ||
Building and site improvements | 5,603,909 | ||
Costs Capitalized Subsequent to Acquisition | 52,176 | ||
Gross Amount at Which Carried at Close of Period | |||
Fully Amortized Improvements | (9,786) | ||
Land | 1,292,894 | ||
Buildings and Improvements | 5,646,299 | ||
Total | 6,939,193 | ||
Accumulated Depreciation | 341,562 | ||
Flex center property | Brookfield Center Property. | South Carolina | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | 4,663,206 | ||
Initial Cost to Company | |||
Land | 714,220 | ||
Building and site improvements | 5,693,147 | ||
Costs Capitalized Subsequent to Acquisition | 148,048 | ||
Gross Amount at Which Carried at Close of Period | |||
Fully Amortized Improvements | (2,456) | ||
Land | 714,220 | ||
Buildings and Improvements | 5,838,739 | ||
Total | 6,552,959 | ||
Accumulated Depreciation | 847,914 | ||
Flex center property | Parkway Center | Virginia | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | 4,992,427 | ||
Initial Cost to Company | |||
Land | 430,549 | ||
Building and site improvements | 6,846,487 | ||
Costs Capitalized Subsequent to Acquisition | 33,190 | ||
Costs Written Off Due to Impairment and Loss on Dispositions | (6,369) | ||
Gross Amount at Which Carried at Close of Period | |||
Land | 430,549 | ||
Buildings and Improvements | 6,873,308 | ||
Total | 7,303,857 | ||
Accumulated Depreciation | 289,623 | ||
Investment properties | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | 62,065,851 | ||
Initial Cost to Company | |||
Land | 16,526,436 | ||
Building and site improvements | 68,351,114 | ||
Costs Capitalized Subsequent to Acquisition | 1,980,574 | ||
Costs Written Off Due to Impairment and Loss on Dispositions | (327,531) | ||
Gross Amount at Which Carried at Close of Period | |||
Fully Amortized Improvements | (614,733) | ||
Land | 16,526,436 | ||
Buildings and Improvements | 69,389,424 | ||
Total | 85,915,860 | ||
Accumulated Depreciation | 9,400,908 | ||
Investment properties | Wells Fargo Facility | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | $ 18,351,981 | ||
Investment properties and assets held for sale | Greenbrier Business Center Property | Virginia | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 26 years | ||
Investment properties and assets held for sale | Greenbrier Business Center Property | Virginia | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 10 years | ||
Investment properties and assets held for sale | Brookfield Center Property. | South Carolina | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 40 years | ||
Investment properties and assets held for sale | Brookfield Center Property. | South Carolina | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 4 years 3 months 18 days | ||
Investment properties and assets held for sale | Parkway Center | Virginia | Buildings and Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 42 years | ||
Investment properties and assets held for sale | Parkway Center | Virginia | Site Improvements | |||
Gross Amount at Which Carried at Close of Period | |||
Life on Which Depreciation in Latest Income Statements is Computed | 11 years |
Schedule III - Real Estate Pr_3
Schedule III - Real Estate Properties and Accumulated Depreciation - Accumulated Depreciation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | $ 86,464,643 | $ 75,967,825 |
Acquisitions | 9,963,258 | 24,053,215 |
Capitalized leasing commissions | 300,331 | 73,458 |
Capitalized tenant improvements | 177,373 | 143,079 |
Building and site improvements | 287,712 | 308,803 |
Furniture, fixtures and equipment | 253,887 | 32,999 |
Loss on impairment of tangible assets | (13,880) | |
Impairment write-offs | (175,671) | |
Fully amortized tenant improvements | (468,561) | (142,645) |
Dispositions of investment properties | (10,873,232) | (13,972,091) |
Balance at end of period | 85,915,860 | 86,464,643 |
Accumulated depreciation | ||
Balance at beginning of period | 7,210,520 | 6,501,713 |
Additions charged to costs and expenses | 3,381,249 | 2,270,648 |
Impairment write-offs | (1,190,861) | (1,561,841) |
Balance at end of period | 9,400,908 | 7,210,520 |
Net investments in real estate - end of period | 76,514,953 | 79,254,123 |
Franklin Square Property | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 19,220,574 | 19,251,826 |
Capitalized leasing commissions | 139,941 | 15,348 |
Capitalized tenant improvements | 10,624 | 45,150 |
Building and site improvements | 14,967 | |
Fully amortized tenant improvements | (176,576) | (106,717) |
Balance at end of period | 19,194,564 | 19,220,574 |
Accumulated depreciation | ||
Balance at beginning of period | 2,686,982 | 2,181,039 |
Additions charged to costs and expenses | 605,419 | 505,943 |
Impairment write-offs | (176,576) | |
Balance at end of period | 3,115,826 | 2,686,982 |
Net investments in real estate - end of period | 16,078,739 | 16,533,592 |
Hanover Square Property | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 11,683,302 | 11,617,856 |
Capitalized leasing commissions | 45,672 | 9,992 |
Building and site improvements | 10,738 | 85,250 |
Fully amortized tenant improvements | (275,527) | (29,796) |
Balance at end of period | 11,464,185 | 11,683,302 |
Accumulated depreciation | ||
Balance at beginning of period | 1,226,885 | 909,211 |
Additions charged to costs and expenses | 310,512 | 317,674 |
Impairment write-offs | (275,527) | |
Balance at end of period | 1,261,870 | 1,226,885 |
Net investments in real estate - end of period | 10,202,315 | 10,456,417 |
Hampton Inn Property | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 13,972,091 | |
Dispositions of investment properties | (13,972,091) | |
Accumulated depreciation | ||
Balance at beginning of period | 1,561,841 | |
Impairment write-offs | (1,561,841) | |
Ashley Plaza Property | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 14,296,145 | 14,282,764 |
Capitalized leasing commissions | 30,679 | 19,513 |
Capitalized tenant improvements | 27,363 | |
Building and site improvements | 4,600 | |
Fully amortized tenant improvements | (6,132) | |
Balance at end of period | 14,358,787 | 14,296,145 |
Accumulated depreciation | ||
Balance at beginning of period | 1,411,023 | 808,059 |
Additions charged to costs and expenses | 613,922 | 602,964 |
Balance at end of period | 2,024,945 | 1,411,023 |
Net investments in real estate - end of period | 12,333,842 | 12,885,122 |
Clemson Best Western University Inn | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 10,568,508 | 10,405,855 |
Building and site improvements | 226,508 | 129,654 |
Furniture, fixtures and equipment | 253,887 | 32,999 |
Impairment write-offs | (175,671) | |
Dispositions of investment properties | (10,873,232) | |
Balance at end of period | 10,568,508 | |
Accumulated depreciation | ||
Balance at beginning of period | 722,300 | 722,300 |
Impairment write-offs | (722,300) | |
Balance at end of period | 722,300 | |
Net investments in real estate - end of period | 9,846,208 | |
Brookfield Center Property. | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 6,445,169 | 6,437,433 |
Capitalized leasing commissions | 17,188 | 7,736 |
Capitalized tenant improvements | 93,058 | |
Fully amortized tenant improvements | (2,456) | |
Balance at end of period | 6,552,959 | 6,445,169 |
Accumulated depreciation | ||
Balance at beginning of period | 579,739 | 319,263 |
Additions charged to costs and expenses | 270,631 | 260,476 |
Impairment write-offs | (2,456) | |
Balance at end of period | 847,914 | 579,739 |
Net investments in real estate - end of period | 5,705,045 | 5,865,430 |
Lancer Center Shopping Center | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 10,071,797 | |
Acquisitions | 9,879,376 | |
Capitalized leasing commissions | 11,198 | 15,560 |
Capitalized tenant improvements | 39,520 | 97,929 |
Building and site improvements | 13,199 | 78,932 |
Loss on impairment of tangible assets | (8,681) | |
Fully amortized tenant improvements | (3,046) | |
Balance at end of period | 10,123,987 | 10,071,797 |
Accumulated depreciation | ||
Balance at beginning of period | 455,898 | |
Additions charged to costs and expenses | 745,816 | 455,898 |
Impairment write-offs | (3,046) | |
Balance at end of period | 1,198,668 | 455,898 |
Net investments in real estate - end of period | 8,925,319 | 9,615,899 |
Greenbrier Business Center Property | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 6,898,842 | |
Acquisitions | 6,896,803 | |
Capitalized leasing commissions | 40,260 | 2,039 |
Building and site improvements | 9,877 | |
Fully amortized tenant improvements | (9,786) | |
Balance at end of period | 6,939,193 | 6,898,842 |
Accumulated depreciation | ||
Balance at beginning of period | 86,014 | |
Additions charged to costs and expenses | 265,334 | 86,014 |
Impairment write-offs | (9,786) | |
Balance at end of period | 341,562 | 86,014 |
Net investments in real estate - end of period | 6,597,631 | 6,812,828 |
Parkway Center | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Balance at beginning of period | 7,280,306 | |
Acquisitions | 7,277,036 | |
Capitalized leasing commissions | 13,372 | 3,270 |
Capitalized tenant improvements | 6,808 | |
Building and site improvements | 9,740 | |
Loss on impairment of tangible assets | (5,199) | |
Fully amortized tenant improvements | (1,170) | |
Balance at end of period | 7,303,857 | 7,280,306 |
Accumulated depreciation | ||
Balance at beginning of period | 41,679 | |
Additions charged to costs and expenses | 249,114 | 41,679 |
Impairment write-offs | (1,170) | |
Balance at end of period | 289,623 | 41,679 |
Net investments in real estate - end of period | 7,014,234 | $ 7,238,627 |
Salisbury | ||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | ||
Acquisitions | 9,963,258 | |
Capitalized leasing commissions | 2,021 | |
Building and site improvements | 13,050 | |
Balance at end of period | 9,978,329 | |
Accumulated depreciation | ||
Additions charged to costs and expenses | 320,501 | |
Balance at end of period | 320,501 | |
Net investments in real estate - end of period | $ 9,657,828 |