Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 09, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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 | P. O. Box 8436 | |
Entity Address, City or Town | Richmond | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 23226 | |
City Area Code | 804 | |
Local Phone Number | 338-7708 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,236,631 | |
Entity Central Index Key | 0001654595 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Stock, $0.01 par value per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Security Exchange Name | NASDAQ | |
Trading Symbol | MDRR | |
8.0% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 8.0% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share | |
Security Exchange Name | NASDAQ | |
Trading Symbol | MDRRP |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
ASSETS | ||
Investment properties, net | $ 66,305,628 | $ 64,577,376 |
Cash | 3,637,400 | 2,234,603 |
Restricted cash | 1,499,034 | 1,575,002 |
Rent and other receivables, net of allowance of $23,694 and $13,413, as of March 31, 2024 and December 31, 2023, respectively | 233,330 | 292,618 |
Assets held for sale | 9,707,154 | |
Unbilled rent | 1,017,128 | 1,109,782 |
Intangible assets, net | 2,774,934 | 2,716,546 |
Other assets | 513,570 | 532,935 |
Total Assets | 75,981,024 | 82,746,016 |
LIABILITIES | ||
Accounts payable and accrued liabilities | 1,031,282 | 1,095,049 |
Intangible liabilities, net | 1,885,210 | 1,865,310 |
Line of credit, short term, net | 1,000,000 | |
Mortgages payable, net | 50,595,020 | 50,772,773 |
Mortgages payable, net, associated with assets held for sale | 9,588,888 | |
Mandatorily redeemable preferred stock, net | 4,757,701 | 4,693,575 |
Total Liabilities | 58,269,213 | 69,015,595 |
EQUITY | ||
Common stock, 2,236,631 and 2,218,810 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 22,366 | 22,188 |
Additional paid-in capital | 51,601,531 | 51,514,209 |
Offering costs | (3,350,946) | (3,350,946) |
Accumulated deficit | (34,529,636) | (35,864,693) |
Total Stockholders' Equity | 13,743,315 | 12,320,758 |
Noncontrolling interests - Operating Partnership | 3,476,835 | 837,320 |
Total Equity | 17,711,811 | 13,730,421 |
Total Liabilities and Equity | 75,981,024 | 82,746,016 |
Hanover Square Property | ||
EQUITY | ||
Noncontrolling interests | 39,996 | 119,140 |
Parkway Property | ||
EQUITY | ||
Noncontrolling interests | $ 451,665 | $ 453,203 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Condensed Consolidated Balance Sheets | ||
Allowance for uncollectible receivables | $ 23,694 | $ 13,413 |
Common stock, shares, issued | 2,236,631 | 2,218,810 |
Common stock, shares, outstanding | 2,236,631 | 2,218,810 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
REVENUE | ||
Total Revenue | $ 2,571,639 | $ 2,460,976 |
OPERATING EXPENSES | ||
Retail center property operating expenses | 428,259 | 512,887 |
Flex center property operating expenses | 144,673 | 176,737 |
Single tenant net lease property operating expenses | 7,708 | 7,728 |
Bad debt expense | 14,056 | 27,122 |
Share based compensation expenses | 277,500 | |
Legal, accounting and other professional fees | 393,078 | 525,628 |
Corporate general and administrative expenses | 296,794 | 117,049 |
Management restructuring expenses | 0 | 241,450 |
Loss on impairment | 0 | 36,743 |
Depreciation and amortization | 1,012,476 | 1,156,348 |
Total Operating Expenses | 2,574,544 | 2,801,692 |
Gain on disposal of investment property | 2,819,502 | |
Loss on extinguishment of debt | 51,837 | |
Operating Income (Loss) | 2,764,760 | (340,716) |
Interest expense | 876,748 | 864,052 |
Net Income (Loss) from Operations | 1,888,012 | (1,204,768) |
Other income | 44,889 | 10,830 |
Other expense | 39,868 | |
Net Income (Loss) | 1,932,901 | (1,233,806) |
Less: Net income (loss) attributable to Operating Partnership noncontrolling interests | 111,757 | (2,903) |
Net Income (Loss) Attributable to Medalist Common Shareholders | $ 1,357,398 | $ (1,221,295) |
Earnings (loss) per common share - basic (in dollars per share) | $ 0.61 | $ (0.55) |
Earnings (loss) per common share - diluted (in dollars per share) | $ 0.60 | $ (0.55) |
Weighted-average number of shares - basic (in shares) | 2,233,182 | 2,219,803 |
Weighted-average number of shares - diluted (in shares) | 2,248,142 | 2,219,803 |
Dividends paid per common share (in dollars per share) | $ 0.01 | $ 0.08 |
Hanover Square Property | ||
REVENUE | ||
Total Revenue | $ 307,325 | $ 331,437 |
OPERATING EXPENSES | ||
Retail center property operating expenses | 88,342 | 89,153 |
Depreciation and amortization | 76,176 | |
Total Operating Expenses | 88,342 | 165,329 |
Gain on disposal of investment property | 2,819,502 | |
Loss on extinguishment of debt | 51,837 | 0 |
Operating Income (Loss) | 2,986,648 | 166,108 |
Interest expense | 129,248 | 173,863 |
Net Income (Loss) | 2,857,400 | (7,755) |
Less: Net income (loss) attributable to noncontrolling interests | 457,184 | (1,241) |
Less: Net income (loss) attributable to Operating Partnership noncontrolling interests | 105,610 | (78) |
Net Income (Loss) Attributable to Medalist Common Shareholders | 2,294,606 | (6,436) |
Parkway Property | ||
OPERATING EXPENSES | ||
Less: Net income (loss) attributable to noncontrolling interests | 6,562 | (8,367) |
Retail center property revenues | ||
REVENUE | ||
Total Revenue | 1,849,617 | 1,835,373 |
Retail center property revenues | Hanover Square Property | ||
REVENUE | ||
Total Revenue | 307,325 | 331,437 |
Flex center property revenues | ||
REVENUE | ||
Total Revenue | 664,067 | 569,297 |
Single tenant net lease property revenues | ||
REVENUE | ||
Total Revenue | $ 57,955 | 56,306 |
OPERATING EXPENSES | ||
Single tenant net lease property operating expenses | $ 7,728 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock | Additional Paid in Capital | Offering Costs. | Accumulated Deficit | Total Shareholders' Equity | Noncontrolling Interests Hanover Square Property | Noncontrolling Interests Parkway Property | Noncontrolling Interest Operating Partnership | Hanover Square Property | Total |
Balance at Dec. 31, 2022 | $ 22,198 | $ 51,519,198 | $ (3,350,946) | $ (30,939,020) | $ 17,251,430 | $ 127,426 | $ 470,685 | $ 842,898 | $ 18,692,439 | |
Balance (shares) at Dec. 31, 2022 | 2,219,803 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Common stock repurchases | $ 0 | |||||||||
Net (loss) income | (1,221,295) | (1,221,295) | (1,241) | (8,367) | (2,903) | $ (7,755) | (1,233,806) | |||
Dividends and distributions | (176,810) | (176,810) | (2,135) | (178,945) | ||||||
Balance at Mar. 31, 2023 | $ 22,198 | 51,519,198 | (3,350,946) | (32,337,125) | 15,853,325 | 126,185 | 462,318 | 837,860 | 17,279,688 | |
Balance (shares) at Mar. 31, 2023 | 2,219,803 | |||||||||
Balance at Dec. 31, 2022 | $ 22,198 | 51,519,198 | (3,350,946) | (30,939,020) | 17,251,430 | 127,426 | 470,685 | 842,898 | 18,692,439 | |
Balance (shares) at Dec. 31, 2022 | 2,219,803 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | 457,184 | |||||||||
Balance at Dec. 31, 2023 | $ 22,188 | 51,514,209 | (3,350,946) | (35,864,693) | 12,320,758 | 119,140 | 453,203 | 837,320 | 13,730,421 | |
Balance (shares) at Dec. 31, 2023 | 2,218,810 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Common stock repurchases | $ 0 | |||||||||
Share based compensation | $ 178 | 87,322 | 87,500 | 190,000 | 277,500 | |||||
Share based compensation (shares) | 17,821 | |||||||||
Redemption of operating partnership units | (61,589) | (61,589) | ||||||||
Net (loss) income | 1,357,398 | 1,357,398 | 457,184 | 6,562 | 111,757 | $ 2,857,400 | 1,932,901 | |||
Dividends and distributions | (22,341) | (22,341) | (479,856) | (8,100) | (653) | (510,950) | ||||
Noncontrolling Interests | (56,472) | 2,400,000 | 2,343,528 | |||||||
Balance at Mar. 31, 2024 | $ 22,366 | $ 51,601,531 | $ (3,350,946) | $ (34,529,636) | $ 13,743,315 | $ 39,996 | $ 451,665 | $ 3,476,835 | $ 17,711,811 | |
Balance (shares) at Mar. 31, 2024 | 2,236,631 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income (Loss) | $ 1,932,901 | $ (1,233,806) |
Adjustments to reconcile consolidated net loss to net cash flows from operating activities | ||
Depreciation | 840,461 | 911,481 |
Amortization | 172,015 | 244,867 |
Loan cost amortization | 23,767 | 26,990 |
Mandatorily redeemable preferred stock issuance cost and discount amortization | 64,126 | 58,804 |
Amortization of lease incentives | 741 | 0 |
Above (below) market lease amortization, net | (64,422) | (73,018) |
Bad debt expense | 14,056 | 27,122 |
Share-based compensation | 277,500 | |
Loss on impairment | 0 | 36,743 |
Loss on extinguishment of debt | 51,837 | |
Gain on disposal of investment property | (2,819,502) | |
Changes in assets and liabilities | ||
Rent and other receivables, net | 45,232 | 84,476 |
Unbilled rent | (1,869) | (48,899) |
Other assets | 19,365 | 66,796 |
Accounts payable and accrued liabilities | (63,767) | 349,168 |
Net cash flows from operating activities | 492,441 | 450,724 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Investment property acquisitions | (145,345) | |
Capital expenditures | (226,662) | (647,690) |
Cash received from disposal of investment properties | 3,110,149 | |
Net cash flows from investing activities | 2,738,142 | (647,690) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Dividends and distributions paid | (510,950) | (178,945) |
Repayment of line of credit, short term | (1,000,000) | |
Operating partnership unit redemption | (61,589) | |
Repayment of mortgages payable | (331,215) | (301,577) |
Net cash flows from financing activities | (1,903,754) | (480,522) |
DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 1,326,829 | (677,488) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 3,809,605 | 5,662,853 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | $ 5,136,434 | $ 4,985,365 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - Supplemental cash flow information - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Additional Cash Flow Elements and Supplemental Disclosures and Non-Cash Activities | ||
CASH AND CASH EQUIVALENTS, end of period, shown in condensed consolidated balance sheets | $ 3,637,400 | $ 3,048,100 |
RESTRICTED CASH including assets restricted for capital and operating reserves and tenant deposits, end of period, shown in condensed consolidated balance sheets | 1,499,034 | 1,937,265 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period shown in the condensed consolidated statements of cash flows | 5,136,434 | 4,985,365 |
Other cash transactions: | ||
Interest paid | 865,664 | $ 796,268 |
Non-cash transactions: | ||
Issuance of operating partnership units for Citibank Acquisition | $ 2,400,000 |
Organization and Basis of Prese
Organization and Basis of Presentation and Consolidation | 3 Months Ended |
Mar. 31, 2024 | |
Organization and Basis of Presentation and Consolidation | |
Organization and Basis of Presentation and Consolidation | Medalist Diversified REIT, Inc. and Subsidiaries Notes to Unaudited Condensed Consolidated Financial Statements 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 March 31, 2024, the REIT, through the Operating Partnership, owned and operated 10 developed properties consisting of four retail center properties, three flex center properties, and three single tenant net lease (“STNL”) properties, and three undeveloped parcels. 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 and wholly-owned limited liability companies which own or operate the properties. The Company owns four retail center properties consisting of (i) the Shops at Franklin Square, a 134,239 square foot retail property located in Gastonia, North Carolina (the “Franklin Square Property”), (ii) the Ashley Plaza Shopping Center, a 156,012 square foot retail property located in Goldsboro, North Carolina (the “Ashley Plaza Property”), (iii) the Lancer Center, a 181,590 square foot retail property located in Lancaster, South Carolina (the “Lancer Center Property”), and (iv) the Salisbury Marketplace Shopping Center, a 79,732 square foot retail property located in Salisbury, North Carolina (the “Salisbury Marketplace Property”). On March 13, 2024, the Company, and its tenant in common partner, sold the Shops at Hanover Square North, a 73,440 square foot retail property located in Mechanicsville, Virginia (the “Hanover Square Shopping Center Property”). The Company and its tenant in common partner retained ownership of the 0.864 acre outparcel (the “Hanover Square Outparcel” and together with the Hanover Square Shopping Century Property, the “Hanover Square Property”). The Company owned 84% of the Hanover Square Shopping Center Property and the Hanover Square Outparcel as a tenant in common with a noncontrolling owner which owned the remaining 16% interest. On March 25, 2024, the Company purchased its tenant in common partner’s 16% interest in the Hanover Square Outparcel (see Note 3, below). Collectively, the sale of the Hanover Square Shopping Center and the acquisition of the tenant in common partner’s 16% interest in the Hanover Square Outparcel are referenced herein as the “Hanover Square Transactions”. The Company owns three flex center properties consisting of (i) Brookfield Center, a 64,880 square foot mixed-use industrial/office property located in Greenville, South Carolina (the “Brookfield Center Property”), (ii) the Greenbrier Business Center, an 89,280 square foot mixed-use industrial/office property located in Chesapeake, Virginia (the “Greenbrier Business Center Property”), and (iii) the Parkway Property, a 64,109 square foot mixed-use industrial office property located in Virginia Beach, Virginia (the "Parkway Property”), in which the Company owns an 82% tenant in common interest with a noncontrolling owner which owns the remaining 18% interest. The Company owns three STNL properties consisting of (i) the Citibank Property, a 4,350 square foot single tenant building on 0.45 acres located in Chicago, Illinois, (ii) the East Coast Wings building, a 5,000 square foot single tenant building on approximately 0.89 acres located in Goldsboro, North Carolina (the “East Coast Wings Property”), and (iii) the T-Mobile building, a 3,000 square foot single tenant building on approximately 0.78 acres located in Goldsboro, North Carolina (the “T-Mobile Property”). The East Coast Wings Property and the T-Mobile Property are both located on outparcels adjacent to the Ashley Plaza Property. Prior to January 1, 2024, the Company included the East Coast Wings Property and the T-Mobile Property as part of the Ashley Plaza Property. The Company also owns three undeveloped parcels which are currently being marketed for use as STNL properties including (i) an outparcel at its Lancer Center Property consisting of approximately 1.80 acres (the “Lancer Outparcel”), (ii) an outparcel at its Salisbury Marketplace Property consisting of approximately 1.20 acres (the “Salisbury Outparcel”) (the exact size of the Lancer Outparcel and Salisbury Outparcel will not be determined until a user is identified), and (iii) the Hanover Square Outparcel consisting of approximately 0.86 acres located adjacent to the Hanover Square Shopping Center Property, which the Company sold on March 13, 2024. The Company prepared the accompanying condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). References to the condensed consolidated financial statements and references to individual financial statements included herein, reference the condensed consolidated financial statements or the respective individual financial statement. All material balances and transactions between the 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, as of March 31, 2024, on commercial properties, including retail properties and flex-industrial 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, and STNL assets with an expected national focus. 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 at the discretion of the Company’s Board of Directors (the “Board”). For all periods prior to July 18, 2023, the Company was externally managed by Medalist Fund Manager, Inc. (the “Manager”). On July 18, 2023, the Company and the Manager entered into an agreement (the “Termination Agreement”) terminating that certain Management Agreement, dated as of March 15, 2016, among the Company, the Operating Partnership and the Manager (the “Management Agreement”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
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) capitalized, while internal acquisition costs will continue to be expensed. 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. 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 November 2023, the Company committed to a plan to sell an asset group associated with the Hanover Square Shopping Center Property that included the land, site improvements, building, building improvements and tenant improvements. As a result, as of December 1, 2023, the Company reclassified these assets, and the related mortgage payable, net, for the Hanover Square Shopping Center Property as assets held for sale and liabilities associated with assets held for sale, respectively. Under ASC 360, depreciation of assets held for sale is discontinued, so no further depreciation or amortization was recorded subsequent to December 1, 2023. The Company believed that the fair value, less estimated costs to sell, exceeded the Company’s carrying cost, so the Company did not record any impairment of assets held for sale related to the Hanover Square Shopping Center Property for any periods, including the three months ended March 31, 2024 and the year ended December 31, 2023, the periods during which the Hanover Square Shopping Center Property was classified as assets held for sale. The Company sold the Hanover Square Shopping Center on March 13, 2024. 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. Details of the deferred costs, net of amortization, arising from the Company’s purchases of its retail center properties, flex center properties and STNL properties are as follows: March 31, 2024 (unaudited) December 31, 2023 Intangible Assets, net Leasing commissions $ 932,217 $ 912,040 Legal and marketing costs 97,889 104,791 Above market leases 91,472 106,907 Net leasehold asset 1,653,356 1,592,808 $ 2,774,934 $ 2,716,546 Intangible Liabilities, net Below market leases $ (1,885,210) $ (1,865,310) 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 three months ended March 31, 2024 and 2023, respectively, were as follows: For the three months ended March 31, 2024 2023 (unaudited) (unaudited) Amortization of above market leases $ (15,434) $ (27,343) Amortization of below market leases 79,856 100,361 $ 64,422 $ 73,018 Amortization of lease origination costs, leases in place and legal and marketing costs represent a component of depreciation and amortization expense. Amortization related to these intangible assets during the three months ended March 31, 2024 and 2023, respectively, were as follows: For the three months ended March 31, 2024 2023 (unaudited) (unaudited) Leasing commissions $ (46,507) $ (56,618) Legal and marketing costs (11,846) (16,205) Net leasehold asset (113,662) (172,044) $ (172,015) $ (244,867) As of March 31, 2024 and December 31, 2023, the Company’s accumulated amortization of lease origination costs, leases in place and legal and marketing costs totaled $2,254,058 and $2,204,404, respectively. During the three months ended March 31, 2024 and 2023, the Company wrote off $122,360 and $273,252, respectively, in accumulated amortization related to fully amortized intangible assets, and $0 and $21,407, respectively, in accumulated amortization related to the write off of intangible assets related to the early terminated leases, discussed above. Future amortization of above and below market leases, lease origination costs, leases in place, legal and marketing costs and tenant relationships is as follows: For the remaining nine months ending December 31, 2024 2025 2026 2027 2028 2029-2041 Total Intangible Assets Leasing commissions $ 129,836 $ 154,496 $ 116,510 $ 97,592 $ 76,167 $ 357,616 $ 932,217 Legal and marketing costs 25,593 24,456 13,842 8,599 5,886 19,513 97,889 Above market leases 25,416 21,292 15,629 14,543 10,114 4,478 91,472 Net leasehold asset 288,837 318,667 223,495 177,171 128,963 516,223 1,653,356 $ 469,682 $ 518,911 $ 369,476 $ 297,905 $ 221,130 $ 897,830 $ 2,774,934 Intangible Liabilities Below market leases, net $ (216,355) $ (227,108) $ (192,535) $ (175,625) $ (153,615) $ (919,972) $ (1,885,210) Impairment Investment Properties The Company reviews its 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 an investment property when the estimated undiscounted cash flows plus its residual value is less than the carrying value of the property. To the extent impairment has occurred, the Company charges to income the excess of the carrying value of the property over its estimated fair value. The Company estimates fair value using unobservable data such as projected future operating income, estimated capitalization rates, or multiples, leasing prospects and local market information. The Company may decide to sell properties that are held for use and the sale prices of these properties may differ from their carrying values. The Company did not record any impairment adjustments to its investment properties resulting from events or changes in circumstances during the three months ended March 31, 2024 and 2023, that would result in the projected value of the Company’s investment properties being below their carrying value. Intangible Assets The Company also 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 three months ended March 31, 2023, the Company determined that the carrying value of certain intangible assets associated with the lease on which the tenant defaulted should be written off and recorded a loss on impairment of $26,896. This amount is included in the loss on impairment reported on the Company’s condensed consolidated statement of operations for the three months ended March 31, 2023. No such amounts were recorded during the three months ended March 31, 2024. Unbilled Rent The Company also reviews the unbilled rent asset recorded on the Company’s condensed consolidated balance sheets for impairment to determine if any amounts may not be recoverable. During the three months ended March 31, 2023, the Company recorded a loss on impairment of $1,192 related to previously recognized straight-line rent related to the defaulting tenant. This amount is included in the loss on impairment reported on the Company’s condensed consolidated statement of operations for the three months ended March 31, 2023. No such amounts were recorded during the three months ended March 31, 2024. Conditional Asset Retirement Obligation A conditional asset retirement obligation represents a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement depends on a future event that may or may not be within the Company’s control. Currently, the Company does not have any conditional asset retirement obligations. However, any such obligations identified in the future would result in the Company recording a liability if the fair value of the obligation can be reasonably estimated. Environmental studies conducted at the time the Company acquired its properties did not reveal any material environmental liabilities, and the Company is unaware of any subsequent environmental matters that would have created a material liability. The Company believes that its properties are currently in material compliance with applicable environmental, as well as non-environmental, statutory and regulatory requirements. The Company did not record any conditional asset retirement obligation liabilities during the three months ended March 31, 2024 and 2023, 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 March 31, 2024, the Company held two cash accounts at a single financial institution with combined balances that exceeded the FDIC limit by $2,592,582. As of December 31, 2023, the Company held two cash accounts at a single financial institution with combined balances that exceeded the FDIC limit by $1,366,872. 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 March 31, 2024 and December 31, 2023, the Company reported $247,983 and $260,898, respectively, in security deposits held as restricted cash. Escrow deposits are restricted cash balances held by lenders for real estate taxes and insurance premiums. As of March 31, 2024 and December 31, 2023, the Company reported $217,000 and $191,139, respectively, in escrow deposits. Capital reserves are restricted cash balances held by lenders for capital improvements, leasing commissions and tenant improvements. As of March 31, 2024 and December 31, 2023, the Company reported $1,034,051 and $1,122,965, respectively, in capital property reserves. March 31, 2024 December 31, Property and Purpose of Reserve (unaudited) 2023 Ashley Plaza Property - maintenance and leasing cost reserve 459,914 439,404 Brookfield Center Property – maintenance and leasing cost reserve 102,573 91,491 Franklin Square Property – leasing costs 471,564 441,360 Hanover Square Property – operating reserve — 150,710 Total $ 1,034,051 $ 1,122,965 Share Retirement ASC 505-30-30-8 provides guidance on accounting for share retirement and establishes two alternative methods for accounting for the repurchase price paid in excess of par value. The Company has elected the method by which the excess between par value and the repurchase price, including costs and fees, is recorded to additional paid in capital on the Company’s condensed consolidated balance sheets. The Company did not engage in any share repurchases or retirements during the three months ended March 31, 2024 and 2023. Revenue Recognition Retail, Flex Center and STNL Property Revenues The Company recognizes minimum rents from its retail center properties, flex center properties and STNL properties on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset being recorded on the condensed consolidated balance sheets. As of March 31, 2024 and December 31, 2023, the Company reported $1,017,128 and $1,109,782, respectively, in unbilled rent. The Company’s leases generally require the tenant to reimburse the Company for a substantial portion of its expenses incurred in operating, maintaining, repairing, insuring and managing the shopping center and common areas (collectively defined as Common Area Maintenance or “CAM” expenses). The Company includes these reimbursements, along with other revenue derived from late fees and seasonal events, on the condensed consolidated statements of operations under the captions "Retail center property revenues”, “Flex center property revenues”, and “Single tenant net lease asset revenues”. (See Recent Accounting Pronouncements, below.) This significantly reduces the Company’s exposure to increases in costs and operating expenses resulting from inflation or other outside factors. The Company accrues reimbursements from tenants for recoverable portions of all these expenses as revenue in the period the applicable expenditures are incurred. The Company calculates the tenant’s share of operating costs by multiplying the total amount of the operating costs by a fraction, the numerator of which is the total number of square feet being leased by the tenant, and the denominator of which is the average total square footage of all leasable buildings at the property. The Company also receives payments for these reimbursements from substantially all its tenants on a monthly basis throughout the year. The Company recognizes differences between previously estimated recoveries and the final billed amounts in the year in which the amounts become final. Since these differences are determined annually under the leases and accrued as of December 31 in the year earned, no such revenues were recognized during the three months ended March 31, 2024 and 2023. 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, any unrecovered intangibles and other assets are written off as a loss on impairment. (See Impairment, above.) The Company did not receive any lease termination fees during the three months ended March 31, 2024 and 2023. Management Restructuring Expenses 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 March 31, 2024 and December 31, 2023, the Company’s allowance for uncollectible rent totaled $23,694 and $13,413, 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 March 31, 2024 and December 31, 2023, 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. Management has evaluated the effect of the guidance provided by GAAP on Accounting for Uncertainty of Income Taxes Use of Estimates The Company has made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and revenues and expenses during the reported period. The Company’s actual results could differ from these estimates. Noncontrolling Interests The ownership interests not held by the REIT are considered noncontrolling interests. There are three elements of noncontrolling interests in the capital structure of the Company. These noncontrolling interests have been reported in equity on the condensed consolidated balance sheets but separate from the Company’s equity. On the condensed consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. The Company’s condensed consolidated statements of changes in stockholders’ equity includes beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity. The first noncontrolling interest is in the Hanover Square Property (consisting of both the Hanover Square Shopping Center and the Hanover Square Outparcel) in which the Company owned an 84% tenancy in common interest through its subsidiary and an outside party owned a 16% tenancy in common interest, prior to the Hanover Square Transactions. Prior to the Hanover Square Transactions, the Hanover Square Property’s net income (loss) is allocated to the noncontrolling ownership interest based on its 16% ownership. During the three months ended March 31, 2024, 16% of the Hanover Square Property’s net income of $2,857,400 or $457,184 $7,755 $1,241 The second 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 three months ended March 31, 2024, 18% of the Parkway Property's net income of $36,453 or $6,562 was allocated to the noncontrolling ownership interest. During the three months ended March 31, 2023, 18% of the Parkway Property’s net loss of $46,482 or $8,367, was allocated to the noncontrolling ownership interest. The third noncontrolling ownership interest consists of the common units of the Operating Partnership (the “Operating Partnership Units”) that are not held by the REIT. In 2017, 15,625 Operating Partnership Units were issued in a 721 exchange, which allows the exchange of interests in real property for units in the operating partnership of a real estate investment trust. The members of a selling limited liability company invested $1,175,000 in the Operating Partnership in exchange for 15,625 Operating Partnership Units. Additionally, effective on January 1, 2020, 11,731 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, a property that was formerly owned by the Company. On August 31, 2020, a holder of Operating Partnership Units converted 665 Operating Partnership Units into shares of the Company’s common stock, $0.01 par value per share (“Common Shares”). On January 18, 2024, the Company issued 38,697 Operating Partnership Units to Francis P. Kavanaugh, representing a portion of his 2024 compensation. On February 16, 2024, the Company redeemed for cash the 11,731 Operating Partnership Units that were issued to the Hampton Inn Property noncontrolling owner. On March 27, 2024, the Company issued 417,391 Operating Partnership Units as consideration for the purchase of the Citibank Property. As of March 31, 2024 and December 31, 2023, there were 471,048 and 26,691 Operating Partnership Units outstanding, respectively, not held by the REIT. As of March 31, 2024 and December 31, 2023, respectively, 14,960 and 26,691 of the Operating Partnership Units not held by the REIT were convertible to Common Shares. Outstanding Operating Partnership Units have been adjusted for the Reverse Stock Split (as defined below). (See Note 7, below). The Operating Partnership Units not held by the REIT represent 17.40% and 1.19% of the outstanding Operating Partnership Units as of the three months ended March 31, 2024 and 2023, respectively. The noncontrolling interest percentage is calculated at any point in time by dividing the number of Operating Partnership Units not owned by the Company by the total number of Operating Partnership 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 Operating Partnership Units are exchanged for the Company’s $0.01 par value per share Common Shares. 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 Operating Partnership Unit holders based on their ownership interest. During the three months ended March 31, 2024, a weighted average of 4.40% of the Operating Partnership’s net income of $2,538,177 , $111,757 , % $243,989 , or $2,903 , Reclassifications Operating Segments previously previously Outstanding Shares All per share amounts, Common Shares outstanding, Operating Partnership Units outstanding, and stock-based compensation amounts for all periods presented reflect our one-for-eight Recent Accounting Pronouncements Upcoming Accounting Pronouncements Improvements to Reportable Segment Disclosures Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures Evaluation of the Company’s Ability to Continue as a Going Concern Under the accounting guidance related to the presentation of financial statements, the Company is required to evaluate, on a quarterly basis, whether or not the entity’s current financial condition, including its sources of liquidity at the date that the condensed consolidated financial statements are issued, will enable the entity to meet its obligations as they come due arising within one year of the date of the issuance of the Company’s condensed consolidated financial statements and to make a determination as to whether or not it is probable, under the application of this accounting guidance, that the entity will be able to continue as a going concern. The Company’s condensed consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The redemption date of the Company’s mandatorily redeemable preferred stock is February 19, 2025 (the “Redemption Date”). The Company will require additional liquidity to fund the redemption. The Company expects to be able to generate this liquidity from a number of sources, including cash on hand, forecasted future cash flows for the periods prior to the Redemption Date, and careful management of the Company’s capital expenditures during the periods prior to the Redemption Date. 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. |
Investment Properties
Investment Properties | 3 Months Ended |
Mar. 31, 2024 | |
Investment Properties | |
Investment Properties | 3. Investment Properties Investment properties consist of the following: March 31, 2024 December 31, (unaudited) 2023 Land $ 14,733,611 $ 13,720,502 Site improvements 3,335,269 3,797,755 Buildings and improvements (1) 59,459,305 58,183,070 Investment properties at cost (2) 77,528,185 75,701,327 Less accumulated depreciation 11,222,557 11,123,951 Investment properties, net $ 66,305,628 $ 64,577,376 (1) Includes tenant improvements (both those acquired as part of the acquisition of the properties and those constructed after the acquisition of the properties), tenant incentives, 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 $840,461 and $911,481 for three months ended March 31, 2024 and 2023, respectively Capitalized Tenant Improvements The Company carries three categories of capitalized tenant improvements on its condensed consolidated balance sheets, all of which are recorded under investment properties, net, on the Company’s condensed consolidated balance sheets. The first category is the allocation of acquisition costs to tenant improvements that is recorded on the Company’s condensed consolidated balance sheets as of the date of the Company’s acquisition of the investment property. The second category is tenant improvement costs incurred and paid by the Company subsequent to the acquisition of the investment property. Both categories are recorded as a component of investment properties on the Company’s condensed consolidated balance sheets. Depreciation expense on both categories is recorded on a straight-line basis as a component of depreciation expense on the Company’s condensed consolidated statement of operations. The third category is tenant improvement costs incurred and paid by the Company subsequent to the acquisition of the investment property that are considered to be lease incentives under ASC 842. Depreciation expense for lease incentives is recorded as a reduction of rental income on a straight-line basis over the term of the respective lease. Details of these deferred costs, net of depreciation are as follows: March 31, 2024 December 31, (unaudited) 2023 Capitalized tenant improvements – acquisition cost allocation, net $ 2,416,009 $ 2,504,953 Capitalized tenant improvements incurred subsequent to acquisition, net 945,426 898,873 Depreciation of capitalized tenant improvements arising from the acquisition cost allocation was $136,155 and $172,888 for the three months ended March 31, 2024 and 2023, respectively. During the three months ended March 31, 2024, the Company recorded $47,211 in tenant improvements arising from the acquisition of the Citibank Property. No such additions were recorded during the three months ended March 31, 2023. During the three months ended March 31, 2023, the Company wrote off capitalized tenant improvements of $8,656 associated with the tenant that abandoned its premises. No such write offs were recorded during the three months ended March 31, 2024. During the three months ended March 31, 2024 and 2023, the Company recorded $110,630 and $377,265, respectively, in capitalized tenant improvements. Depreciation of capitalized tenant improvements incurred subsequent to acquisition was $64,077 and $32,265 for the three months ended March 31, 2024 and 2023, respectively. Depreciation of tenant improvements considered to be lease incentives and recorded as a reduction of rental income was $741 and $0 for the three months ended March 31, 2024 and 2023, respectively. Capitalized Leasing Commissions The Company carries two categories of capitalized leasing commissions on its condensed consolidated balance sheets. The first category is the allocation of acquisition costs to leasing commissions that is recorded as an intangible asset (see Note 2, above, for a discussion of the Company’s accounting treatment for intangible assets) on the Company’s condensed consolidated balance sheet as of the date of the Company’s acquisition of the investment property. The second category is leasing commissions incurred and paid by the Company subsequent to the acquisition of the investment property. These costs are carried on the Company’s condensed consolidated balance sheets under investment properties. The Company generally records depreciation of capitalized leasing commissions on a straight-line basis over the terms of the related leases. Details of these deferred costs, net of depreciation are as follows: March 31, 2024 December 31, (unaudited) 2023 Capitalized leasing commissions, net $ 768,801 $ 759,677 During the three months ended March 31, 2024 and 2023, the Company recorded $54,963 and $90,637, respectively, in capitalized leasing commissions. Depreciation on capitalized leasing commissions was $45,839 and $31,930 for the three months ended March 31, 2024 and 2023, respectively. Assets Held for Sale The Company records properties as assets held for sale, and any associated mortgages payable, net, as mortgages payable, net, associated with assets held for sale, on the Company’s condensed consolidated balance sheets when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year. During November 2023, the Company committed to a plan to sell an asset group associated with the Hanover Square Shopping Center Property that includes the land associated with the Hanover Square Shopping Center (excluding the land associated with the Hanover Square Outparcel), site improvements, building, building improvements and tenant improvements. As a result, as of December 1, 2023, the Company reclassified these assets, and the related mortgage payable, net, for the Hanover Square Shopping Center Property as assets held for sale and liabilities associated with assets held for sale, respectively. Under ASC 360, depreciation of assets held for sale is discontinued, so no further depreciation or amortization was recorded subsequent to December 1, 2023. The Company believed that the fair value, less estimated costs to sell, exceeded the Company’s carrying cost, so the Company has not recorded any impairment of assets held for sale related to the Hanover Square Shopping Center Property for any period subsequent to December 1, 2023. As of March 31, 2024 and December 31, 2023, assets held for sale and liabilities associated with assets held for sale consisted of the following: March 31, 2024 December 31, (unaudited) 2023 Investment properties, net $ — $ 9,707,154 Total assets held for sale $ — $ 9,707,154 March 31, 2024 December 31, (unaudited) 2023 Mortgages payable, net $ — $ 9,588,888 Total liabilities associated with assets held for sale $ — $ 9,588,888 Sale of Investment Property On March 13, 2024, the Company sold the Hanover Square Shopping Center Property to an unrelated third party for a sale price of $13.0 million, less credits for repairs of $85,000, resulting in a gain on disposal of investment properties of $2,819,502 reported on the Company’s condensed consolidated statement of operations for the three months ended March 31, 2024. The Company did not report any gain or loss on the disposal of investment properties for the three months ended March 31, 2023. The Company reports properties that are either previously disposed of or currently held for sale in continuing operations in the Company’s condensed consolidated statements of operations if the disposition, or anticipated disposition, of the assets does not represent a shift in the Company’s investment strategy. The Company’s sale of the Hanover Square Shopping Center Property does not constitute a change in the Company’s investment strategy, which continues to include retail center properties as a targeted asset class. Operating results of the Hanover Square Shopping Center Property, which are included in continuing operations, are as follows: For the three months ended March 31, 2024 2023 (unaudited) (unaudited) Revenue Retail center property revenues $ 307,325 $ 331,437 Total Revenue 307,325 331,437 Operating Expenses Retail center property operating expenses 88,342 89,153 Depreciation and amortization — 76,176 Total Operating Expenses 88,342 165,329 Gain on disposal of investment properties 2,819,502 — Loss on extinguishment of debt 51,837 — Operating Income 2,986,648 166,108 Interest expense 129,248 173,863 Net Income (Loss) 2,857,400 (7,755) Less: Net income (loss) attributable to Hanover Square Property noncontrolling interests 457,184 (1,241) Less: Net income (loss) attributable to Operating Partnership noncontrolling interests 105,610 (78) Net Income (Loss) Attributable to Medalist Common Shareholders $ 2,294,606 $ (6,436) 2024 Property Acquisitions Acquisition of 16% noncontrolling interest in the Hanover Square Outparcel On March 25, 2024, the Company completed the acquisition of its tenant in common partner’s 16% ownership interest in the Hanover Square Outparcel through a wholly-owned subsidiary. The purchase price for the 16% interest in the Hanover Square Outparcel was $98,411 paid in cash. The Company’s total investment was $100,891. The Company incurred $2,480 of closing costs which were capitalized and added to the tangible assets acquired. Citibank Property On March 28, 2024, the Company completed its acquisition of the Citibank Property, a 4,350 square foot single tenant building on 0.45 acres located in Chicago, Illinois, through a wholly-owned subsidiary, from RMP 3535 N. Central Ave., LLC. The sole manager and member of RMP 3535 N. Central Ave., LLC is CWS BET Seattle, LP, a Delaware limited partnership, a company controlled and owned by Frank Kavanaugh, the Company’s Chief Executive Officer and a member of the Company’s Board of Directors. The Citibank Property, built in 1954 and subsequently renovated, was 100% leased to Citibank, NA. The purchase price for the Citibank Property was $2,400,000 paid through the issuance of 417,391 operating partnership units at a price of $5.75 per operating partnership unit. The Company’s total investment was $2,444,454. The Company incurred $44,454 of closing costs which were capitalized and added to the tangible assets acquired. NCI Interest in Hanover Square Citibank Outparcel Property Total Fair value of assets acquired: Investment property $ 100,891 (a) $ 2,298,373 (a) $ 2,399,264 Lease intangibles — 245,837 (b) 245,837 Below market leases — (99,756) (b) (99,756) Fair value of net assets acquired $ 100,891 (b) $ 2,444,454 (c) $ 2,545,345 Purchase consideration: Consideration paid with cash $ 100,891 (c) $ 44,454 (d) $ 145,345 Consideration paid with operating partnership units — 2,400,000 (e) 2,400,000 Total consideration $ 100,891 (d) $ 2,444,454 (f) $ 2,545,345 NCI Interest in Hanover Square Outparcel a. Represents the acquisition cost of the land acquired. Closing costs were allocated and added to the fair value of the tangible assets acquired. b. Represents the total acquisition cost of the land acquired at closing. c. Represents cash paid for closing costs. d. Represents the consideration paid for the acquisition cost of the assets acquired. Citibank Property a. Represents the fair value of the investment property acquired which includes land, buildings, site improvements and tenant improvements. The fair value was determined using the market approach, the cost approach, the income approach or a combination thereof. Closing costs were allocated and added to the fair value of the tangible assets acquired. b. Represents the fair value of lease intangibles. Lease intangibles include leasing commissions, leases in place, 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 for closing costs paid at closing or directly by the Company outside of closing. e. Represents issuance of 417,391 Operating Partnership Units at $5.75 per Operating Partnership Unit. See Note 7, below. f. Represents the consideration paid for the fair value of the assets and liabilities acquired. |
Mandatorily Redeemable Preferre
Mandatorily Redeemable Preferred Stock | 3 Months Ended |
Mar. 31, 2024 | |
Mandatorily Redeemable Preferred Stock | |
Mandatorily Redeemable Preferred Stock | 4. On February 19, 2020, the Company issued and sold 200,000 shares of 8.0% Series A cumulative redeemable preferred stock at $23.00 per share, resulting in gross proceeds of $4,600,000 . Net proceeds from the issuance were $3,860,882 , which includes the impact of the underwriter’s discounts, selling commissions and legal, accounting and other professional fees, and is presented on the Company’s condensed consolidated balance sheets as mandatorily redeemable preferred stock. If outstanding on February 19, 2025, the mandatorily redeemable preferred stock must be redeemed by the Company, out of funds legally available therefor, 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. The Company believes that it has a range of options available to fund the redemption of the mandatorily redeemable preferred stock including using a combination of cash on hand and cash generated from operations for the remaining nine months ended December 31, 2024. In addition to these funding sources, the Company believes that it could generate cash to redeem the mandatorily redeemable preferred stock by issuing a new series of preferred stock or issuing other debt or equity instruments. There is no assurance that the Company will be able to generate sufficient funding to fund the redemption of the mandatorily redeemable preferred stock. The Company has classified the mandatorily redeemable preferred stock as a liability in accordance with ASC Topic No. 480, “ Distinguishing Liabilities from Equity ,” which states that mandatorily redeemable financial instruments should be classified as liabilities and therefore the related dividend payments are treated as a component of interest expense in the accompanying condensed consolidated statements of operations (see Note 5, below, for a discussion of interest expense associated with the mandatorily redeemable preferred stock). For the following periods during which 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 April 28, 2023 April 25, 2023 0.50 January 20, 2023 - April 20, 2023 November 1, 2023 October 30, 2023 0.50 April 21, 2023 - July 20, 2023 November 1, 2023 October 30, 2023 0.50 July 21, 2023 - October 20, 2023 February 6, 2024 February 2, 2024 0.50 October 21, 2023 - January 20, 2024 April 25, 2024 April 22, 2024 0.50 January 21, 2024 - April 21, 2024 As of March 31, 2024 and December 31, 2023, the Company recorded $70,004 and $70,004 , respectively, in accrued but unpaid dividends on the mandatorily redeemable preferred stock. This amount is reported in accounts payable and accrued liabilities on the Company’s condensed consolidated balance sheets. The mandatorily redeemable preferred stock was issued at $23.00 per share, a $2.00 per share discount. The total discount of $400,000 is being amortized over the five-year life of the shares using the effective interest method. Additionally, the Company incurred $739,118 in legal, accounting, other professional fees and underwriting discounts related to this offering. These costs were recorded as deferred financing costs on the accompanying condensed consolidated balance sheets as a direct deduction from the carrying amount of the mandatorily redeemable preferred stock liability and are being amortized using the effective interest method over the term of the agreement. Amortization of the discount and deferred financing costs related to the mandatorily redeemable preferred stock totaling $64,126 and $58,804 was included in interest expense for the three months ended March 31, 2024 and 2023, respectively, in the accompany ing condensed consolidated statements of operations. Accumulated amortization of the discount and deferred financing costs was $896,819 and $832,693 as of March 31, 2024 and December 31, 2023, respectively. |
Loans Payable
Loans Payable | 3 Months Ended |
Mar. 31, 2024 | |
Loans Payable | |
Loans Payable | 5. Loans Payable Mortgages Payable The Company’s mortgages payables, net consists of the following: March 31, Monthly Interest 2024 December 31, Property Payment Rate Maturity (unaudited) 2023 Franklin Square (a) Interest only 3.808 % December 2031 $ 13,250,000 $ 13,250,000 Ashley Plaza (b) $ 52,795 3.75 % September 2029 10,651,510 10,708,557 Brookfield Center (c) $ 22,876 3.90 % November 2029 4,547,770 4,571,410 Parkway Center (d) $ 28,161 Variable November 2031 4,856,285 4,870,403 Wells Fargo Mortgage Facility (e) $ 103,438 4.50 % June 2027 17,832,561 17,939,276 Unamortized issuance costs, net (543,106) (566,873) Total mortgages payable, net $ 50,595,020 $ 50,772,773 (a) The mortgage loan for the Franklin Square Property 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 mortgage loan 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 March 31, 2024 and December 31, 2023, the Company believes that it is compliant with these covenants. The Company has guaranteed the payment and performance of the obligations of the mortgage loan. (b) 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 of its term. 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. Effective on December 26, 2023, the Company assumed certain guaranty obligations under the Ashley Plaza Property mortgage loan related to the Guaranty Substitution (see below). These obligations include covenants for the Company to maintain a net worth of $11,400,000 , excluding the liabilities associated with the mortgage loan for the Ashley Plaza Property, and for the Company to maintain liquid assets of no less than $1,140,000 . As of March 31, 2024 and December 31, 2023, the Company believes that it is compliant with these covenants. (c) The mortgage loan for the Brookfield Center Property bears interest at a fixed rate of 3.90 % and was interest only for the first twelve months of the term. 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. Effective on December 26, 2023, the Company assumed certain guaranty obligations under the Brookfield Center Property mortgage loan related to the Guaranty Substitution (see below). These obligations include covenants for the Company to maintain a net worth of $4,850,000 , excluding the liabilities associated with the mortgage loan for the Brookfield Center Property, and for the Company to maintain liquid assets of no less than $485,000 . As of March 31, 2024 and December 31, 2023, the Company believes that it is compliant with these covenants. (d) The interest rate for the mortgage loan for the Parkway Property was originally based on ICE LIBOR plus 225 basis points, with a minimum rate of 2.25 %. After the discontinuation of LIBOR on June 30, 2023, the ICE LIBOR index was replaced by Term SOFR, with an adjusted margin of 236.44 basis points. Under the terms of the mortgage, the interest rate payable each month shall not change by greater than 1 % during any six-month period and 2 % during any 12-month period. As of March 31, 2024 and December 31, 2023 the rate in effect for the Parkway Property mortgage was 7.05 %. 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. The mortgage loan for the Parkway Property includes a covenant to maintain a debt service coverage ratio of not less than 1.30 to 1.00 on an annual basis . As of March 31, 2024 and December 31, 2023, the Company believes that it is compliant with this covenant. (e) 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. 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 combined minimum debt yield of 9.5% on the Salisbury Marketplace Property, the Lancer Center Property and the Greenbrier Business Center Property, and the maintenance of liquid assets of not less than $1,500,000 . As of March 31, 2024 and December 31, 2023, the Company believes that it is compliant with these covenants. Guaranty Substitution Mortgages payable, net, associated with assets held for sale The Company’s mortgages payables, net, associated with assets held for sale, consists of the following: Balance March 31, Monthly Interest 2024 December 31, Property Payment Rate Maturity (unaudited) 2023 Hanover Square (a) $ 78,098 6.94 % December 2027 — 9,640,725 Unamortized issuance costs, net — (51,837) Total mortgages payable, net, associated with assets held for sale $ — $ 9,588,888 (a) 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 included interest at the fixed rate, and principal, based on a twenty-five-year amortization schedule. On March 13, 2024, the Company sold the Hanover Square Shopping Center Property and repaid the mortgage loan for the Hanover Square Property. Loss on Extinguishment of Debt – Hanover Square Property Mortgage Payable On March 13, 2024, the Company sold the Hanover Square Shopping Center Property and repaid the mortgage loan for the Hanover Square Property. The Company accounted for the repayment of the mortgage payable under debt extinguishment accounting in accordance with ASC 470. During the three months ended March 31, 2024, the Company recorded a loss on extinguishment of debt of $51,837 consisting of unamortized loan issuance costs. No such loss was recorded during the three months ended March 31, 2023. Interest rate protection transaction 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 (the “Interest Rate Protection Transaction”). Under this agreement, the Company’s interest rate exposure is capped at 5.25% if USD 1-Month ICE LIBOR exceeds 3%. Effective on July 1, 2023, the interest rate index under the Interest Rate Protection Transaction automatically converted to SOFR. SOFR was 5.33% and 5.35% as of March 31, 2024 and December 31, 2023, 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 March 31, 2024 and December 31, 2023, the fair value of the Interest Rate Protection Transaction was $209,053 and $173,715, respectively, and is recorded under other assets on the Company’s balance sheets. The Company reports changes in the fair value of the derivative in other income on its condensed consolidated statements of operations. For the period from September 1, 2022 through June 30, 2023, LIBOR, and for the period from July 1, 2023 through March 31, 2024, SOFR exceeded the 3% cap Wells Fargo Line of Credit Interest expense Interest expense, including amortization of capitalized issuance costs consists of the following: For the three months ended March 31, 2024 (unaudited) Amortization Interest rate Mortgage of discounts and protection Other Interest capitalized transaction interest Expense issuance costs payments expense Total Franklin Square $ 127,541 $ 7,093 $ — $ — $ 134,634 Hanover Square 129,248 — — — 129,248 Ashley Plaza 101,156 4,358 — — 105,514 Brookfield Center 44,988 2,837 — — 47,825 Parkway Center 85,675 2,757 (20,787) — 67,645 Wells Fargo Mortgage Facility 203,598 6,722 — — 210,320 Wells Fargo Line of Credit — — — 15,144 15,144 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 64,126 — 100,000 164,126 Other interest — — — 2,292 2,292 Total interest expense $ 692,206 $ 87,893 $ (20,787) $ 117,436 $ 876,748 For the three months ended March 31, 2023 (unaudited) Amortization Interest rate Mortgage of discounts and protection Other Interest capitalized transaction interest Expense issuance costs payments expense Total Franklin Square $ 126,140 7,093 $ — — $ 133,233 Hanover Square 170,640 3,223 — — 173,863 Ashley Plaza 102,133 4,357 — — 106,490 Brookfield Center 45,391 2,838 — — 48,229 Parkway Center 47,257 2,757 (19,342) — 30,672 Wells Fargo Mortgage Facility 206,039 6,722 — — 212,761 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 58,804 — 100,000 158,804 Total interest expense $ 697,600 $ 85,794 $ (19,342) $ 100,000 $ 864,052 Interest accrued and accumulated amortization of capitalized issuance costs consist of the following: As of March 31, 2024 (unaudited) As of December 31, 2023 Accumulated Accumulated amortization of amortization Accrued capitalized Accrued of capitalized interest issuance costs interest issuance costs Franklin Square $ 43,448 $ 66,201 $ 43,448 $ 59,108 Hanover Square — — 55,755 71,696 Ashley Plaza 34,396 79,897 34,580 75,539 Brookfield Center — 51,081 — 48,244 Parkway Center 28,531 26,647 28,614 23,890 Wells Fargo Mortgage Facility — 47,053 — 40,331 Amortization and accrued preferred stock dividends on mandatorily redeemable preferred stock 70,004 (1) 896,819 70,004 (1) 832,693 Total $ 176,379 $ 1,167,698 $ 232,401 $ 1,151,501 (1) Recorded as accrued interest under accounts payable and accrued liabilities on the Company’s condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively. Debt Maturity The Company’s scheduled principal repayments on indebtedness as of March 31, 2024 are as follows: Mortgages Payable For the remaining nine months ending December 31, 2024 $ 612,808 2025 1,091,730 2026 1,139,886 2027 17,280,528 2028 721,207 Thereafter 30,291,967 Total principal payments and debt maturities 51,138,126 Less unamortized issuance costs (543,106) Net principal payments and debt maturities $ 50,595,020 |
Rentals under Operating Leases
Rentals under Operating Leases | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 are as follows: For the remaining nine months ending December 31, 2024 $ 5,424,102 2025 6,656,905 2026 4,913,650 2027 3,981,719 2028 3,238,444 Thereafter 7,136,356 Total minimum rents $ 31,351,176 |
Equity
Equity | 3 Months Ended |
Mar. 31, 2024 | |
Equity | |
Equity | 7. Equity The Company has authority to issue 1,000,000,000 shares consisting of 750,000,000 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 an 82.60% and 98.81% interest in the Operating Partnership as of March 31, 2024 and December 31, 2023, respectively. Limited partners in the Operating Partnership who have held their Operating Partnership Units for one year or longer have the right to redeem their common Operating Partnership Units for cash or, at the REIT’s option, Common Shares at a ratio of one Operating Partnership Unit for one common share. Under the Agreement of Limited Partnership, distributions to Operating Partnership 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 Operating Partnership Unit as dividends per share are paid to the REIT’s holders of Common Shares. Completion of 1-for-8 Reverse Stock Split On May 3, 2023, the Company completed a reverse stock split of its Common Shares, and a corresponding adjustment to the outstanding common Operating Partnership Units of the Operating Partnership, at a ratio of 1 eight Shelf Registration On June 21, 2021, the Company filed a shelf registration statement on Form S-3 with the SEC. The Company incurred $84,926 in legal costs, filing fees and other costs associated with this shelf registration statement which are recorded as offering costs as part of stockholders' equity on the Company’s condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively. Common Shares and Operating Partnership Units Outstanding As of March 31, 2024 and December 31, 2023, there were 2,707,679 and 2,245,501 Operating Partnership Units outstanding, respectively, with the REIT owning 2,236,631 and 2,218,810 of these Operating Partnership Units, respectively. As of March 31, 2024 and December 31, 2023, the remaining 471,048 and 26,691 Operating Partnership Units, respectively, are held by noncontrolling, limited partners. As of March 31, 2024 and December 31, 2023, respectively, there were 2,236,631 and 2,218,810 Common Shares of the REIT outstanding, respectively. As of March 31, 2024 and December 31, 2023, there were 14,960 Operating Partnership Units and 26,691 Operating Partnership Units, respectively, held by noncontrolling, limited partners that were eligible for conversion to 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) 30,000 Common Shares 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 January 18, 2024, the Compensation Committee approved a grant of 15,275 Common Shares to the Company’s five independent directors, a grant of 2,546 Common Shares to a On each January 1 during the term of the Equity Incentive Plan, the maximum number of Common Shares that may be issued under the Equity Incentive Plan will increase by eight percent (8%) of any additional Common Shares or interests in the Operating Partnership issued (i) after the completion date the Company’s initial registered public offering of Common Shares, 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. During the year ended December 31, 2023, no shares were issued under the Equity Incentive Plan so no adjustment was made as of January 1, 2024, and the shares available for issuance under the Equity Incentive Plan remained at 61,413 shares. As of March 31, 2024, there are 4,895 shares available for issuance under the Equity Incentive Plan. Earnings Per Share Basic earnings per share for the 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 March 31, 2024 and 2023, respectively, 14,960 and 26,691 Operating Partnership Units held by noncontrolling, limited partners were eligible to be converted, on a one-to-one basis, into Common Shares. For the three months ended March 31, 2023, the Operating Partnership Units and the equivalent Common Shares attributable to the conversion of the Operating Partnership Units have been excluded from the Company’s diluted earnings per share calculation because their inclusion would be antidilutive. However, for the three months ended March 31, 2024, the Operating Partnership Units and the equivalent Common Shares attributable to the conversion of the Operating Partnership Units have been included in the diluted earnings per share calculation. The Company's earnings (loss) per common share is determined as follows: Three months ended March 31, 2024 2023 (unaudited) (unaudited) Basic and diluted shares outstanding Weighted average Common Shares – basic 2,233,182 2,219,803 Effect of conversion of Operating Partnership Units 14,960 26,691 Weighted average Common Shares – diluted 2,248,142 2,246,494 Calculation of earnings per share – basic and diluted Net loss attributable to common shareholders $ (1,221,295) Weighted average Common Shares – basic and diluted 2,219,803 Loss per share – basic and diluted $ (0.55) Calculation of earnings per share – basic Net income attributable to common shareholders $ 1,357,398 Weighted average Common Shares – basic 2,233,182 Earnings per share – basic $ 0.61 Calculation of earnings per share – diluted Net income attributable to common shareholders $ 1,357,398 Weighted average Common Shares – diluted 2,248,142 Earnings per share – diluted $ 0.60 Dividends and Distributions During the three months ended March 31, 2024, dividends in the amount of $0.01 per share were paid on February 6, 2024, to stockholders of record on February 2, 2024. During the three months ended March 31, 2023, dividends in the amount of $0.08 per share were paid on January 27, 2023, to shareholders of record on January 24, 2023. Total dividends and distributions to noncontrolling interests paid during three months ended March 31, 2024 and 2023, respectively, are as follows: Three months ended March 31, 2024 2023 (unaudited) (unaudited) Common shareholders (dividends) $ 22,341 $ 176,810 Hanover Square Property noncontrolling interest (distributions) 479,856 — Parkway Property noncontrolling interest (distributions) 8,100 — Operating Partnership Unit holders (distributions) 653 2,135 Total dividends and distributions $ 510,950 $ 178,945 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
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 approximately 99% of the total annualized base revenues of the properties in its portfolio as of March 31, 2024. 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 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 March 31, 2024 and December 31, 2023, all of the Company’s long-term debt either bore interest at fixed rates or was capped to a fixed rate. The Company’s debt obligations are more fully described in Note 5, Loans Payable, above. 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 | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions | |
Related Party Transactions | 9. Related Party Transactions Citibank Property Acquisition On March 28, 2024, the Company acquired the Citibank Property (see Note 3, above) from RMP 3535 N. Central Ave., LLC. The sole manager and member of RMP 3535 N. Central Ave., LLC is CWS BET Seattle, LP, a Delaware limited partnership, a company controlled and owned by Frank Kavanaugh, the Company’s Chief Executive Officer and a member of the Company’s Board of Directors. Pursuant to the Company’s Related Person Transaction Policy, the terms of the acquisition were determined to be those that would normally be agreed upon in an arms-length transaction. Staffing Agreement The Company has entered into the Staffing Agreement with the Consultant to employ staff on behalf of the Company. The Consultant’s sole member is C. Brent Winn, Jr., our Chief Financial Officer. Under the Staffing Agreement, the Company reimburses the Consultant for any approved employee’s salary, payroll taxes and benefits, including health insurance and retirement benefits, and related expenses. All expenses are reimbursed at cost and without markup. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2024 | |
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. For the three months ended March 31, 2024 and 2023, respectively, the Company had the following reportable segments: retail center properties, flex center properties and STNL properties. During the periods presented, there have been no material intersegment transactions. Although the Company’s flex center properties have 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. Further, although the Company’s STNL properties have tenants that are similar to tenants in its retail center properties, the Company considers its STNL properties as a separate reportable segment. STNL properties are also considered by the real estate industry as a separate asset class. 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, and other property income; and operating expenses include operating expenses. 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 items, are not allocated among segments. The following table presents property operating revenues, expenses and NOI by product type: The following table presents property operating revenues, expenses and NOI by product type: For the three months ended March 31, Retail center properties Flex center properties STNL properties Total 2024 2023 2024 2023 2024 2023 2024 2023 Revenues $ 1,849,617 $ 1,835,373 $ 664,067 $ 569,297 $ 57,955 $ 56,306 $ 2,571,639 $ 2,460,976 Operating expenses 428,259 512,887 144,673 176,737 7,708 7,728 580,640 697,352 Bad debt expense — 125 14,056 26,997 — — 14,056 27,122 Net operating income $ 1,421,358 $ 1,322,361 $ 505,338 $ 365,563 $ 50,247 $ 48,578 $ 1,976,943 $ 1,736,502 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events | |
Subsequent Events | 11. Subsequent Events As of May 9, 2024, the following events have occurred subsequent to the March 31, 2024 effective date of the condensed consolidated financial statements: Common Stock Dividend On April 25, 2024, a dividend in the amount of $0.02 per share was paid to common stockholders and Operating Partnership Unit holders of record on April 22, 2024. Mandatorily Redeemable Preferred Stock Dividend On April 25, 2024, a dividend in the amount of $0.50 per share was paid to mandatorily redeemable preferred stockholders of record on April 22, 2024 for the period from January 21, 2024 through April 21, 2024. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Significant Accounting Policies | |
Investment Properties | Investment Properties The Company has adopted Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805) capitalized, while internal acquisition costs will continue to be expensed. 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. |
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 November 2023, the Company committed to a plan to sell an asset group associated with the Hanover Square Shopping Center Property that included the land, site improvements, building, building improvements and tenant improvements. As a result, as of December 1, 2023, the Company reclassified these assets, and the related mortgage payable, net, for the Hanover Square Shopping Center Property as assets held for sale and liabilities associated with assets held for sale, respectively. Under ASC 360, depreciation of assets held for sale is discontinued, so no further depreciation or amortization was recorded subsequent to December 1, 2023. The Company believed that the fair value, less estimated costs to sell, exceeded the Company’s carrying cost, so the Company did not record any impairment of assets held for sale related to the Hanover Square Shopping Center Property for any periods, including the three months ended March 31, 2024 and the year ended December 31, 2023, the periods during which the Hanover Square Shopping Center Property was classified as assets held for sale. The Company sold the Hanover Square Shopping Center on March 13, 2024. |
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. Details of the deferred costs, net of amortization, arising from the Company’s purchases of its retail center properties, flex center properties and STNL properties are as follows: March 31, 2024 (unaudited) December 31, 2023 Intangible Assets, net Leasing commissions $ 932,217 $ 912,040 Legal and marketing costs 97,889 104,791 Above market leases 91,472 106,907 Net leasehold asset 1,653,356 1,592,808 $ 2,774,934 $ 2,716,546 Intangible Liabilities, net Below market leases $ (1,885,210) $ (1,865,310) 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 three months ended March 31, 2024 and 2023, respectively, were as follows: For the three months ended March 31, 2024 2023 (unaudited) (unaudited) Amortization of above market leases $ (15,434) $ (27,343) Amortization of below market leases 79,856 100,361 $ 64,422 $ 73,018 Amortization of lease origination costs, leases in place and legal and marketing costs represent a component of depreciation and amortization expense. Amortization related to these intangible assets during the three months ended March 31, 2024 and 2023, respectively, were as follows: For the three months ended March 31, 2024 2023 (unaudited) (unaudited) Leasing commissions $ (46,507) $ (56,618) Legal and marketing costs (11,846) (16,205) Net leasehold asset (113,662) (172,044) $ (172,015) $ (244,867) As of March 31, 2024 and December 31, 2023, the Company’s accumulated amortization of lease origination costs, leases in place and legal and marketing costs totaled $2,254,058 and $2,204,404, respectively. During the three months ended March 31, 2024 and 2023, the Company wrote off $122,360 and $273,252, respectively, in accumulated amortization related to fully amortized intangible assets, and $0 and $21,407, respectively, in accumulated amortization related to the write off of intangible assets related to the early terminated leases, discussed above. Future amortization of above and below market leases, lease origination costs, leases in place, legal and marketing costs and tenant relationships is as follows: For the remaining nine months ending December 31, 2024 2025 2026 2027 2028 2029-2041 Total Intangible Assets Leasing commissions $ 129,836 $ 154,496 $ 116,510 $ 97,592 $ 76,167 $ 357,616 $ 932,217 Legal and marketing costs 25,593 24,456 13,842 8,599 5,886 19,513 97,889 Above market leases 25,416 21,292 15,629 14,543 10,114 4,478 91,472 Net leasehold asset 288,837 318,667 223,495 177,171 128,963 516,223 1,653,356 $ 469,682 $ 518,911 $ 369,476 $ 297,905 $ 221,130 $ 897,830 $ 2,774,934 Intangible Liabilities Below market leases, net $ (216,355) $ (227,108) $ (192,535) $ (175,625) $ (153,615) $ (919,972) $ (1,885,210) |
Impairment | Impairment Investment Properties The Company reviews its 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 an investment property when the estimated undiscounted cash flows plus its residual value is less than the carrying value of the property. To the extent impairment has occurred, the Company charges to income the excess of the carrying value of the property over its estimated fair value. The Company estimates fair value using unobservable data such as projected future operating income, estimated capitalization rates, or multiples, leasing prospects and local market information. The Company may decide to sell properties that are held for use and the sale prices of these properties may differ from their carrying values. The Company did not record any impairment adjustments to its investment properties resulting from events or changes in circumstances during the three months ended March 31, 2024 and 2023, that would result in the projected value of the Company’s investment properties being below their carrying value. Intangible Assets The Company also 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 three months ended March 31, 2023, the Company determined that the carrying value of certain intangible assets associated with the lease on which the tenant defaulted should be written off and recorded a loss on impairment of $26,896. This amount is included in the loss on impairment reported on the Company’s condensed consolidated statement of operations for the three months ended March 31, 2023. No such amounts were recorded during the three months ended March 31, 2024. Unbilled Rent The Company also reviews the unbilled rent asset recorded on the Company’s condensed consolidated balance sheets for impairment to determine if any amounts may not be recoverable. During the three months ended March 31, 2023, the Company recorded a loss on impairment of $1,192 related to previously recognized straight-line rent related to the defaulting tenant. This amount is included in the loss on impairment reported on the Company’s condensed consolidated statement of operations for the three months ended March 31, 2023. No such amounts were recorded during the three months ended March 31, 2024. |
Conditional Asset Retirement Obligation | Conditional Asset Retirement Obligation A conditional asset retirement obligation represents a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement depends on a future event that may or may not be within the Company’s control. Currently, the Company does not have any conditional asset retirement obligations. However, any such obligations identified in the future would result in the Company recording a liability if the fair value of the obligation can be reasonably estimated. Environmental studies conducted at the time the Company acquired its properties did not reveal any material environmental liabilities, and the Company is unaware of any subsequent environmental matters that would have created a material liability. The Company believes that its properties are currently in material compliance with applicable environmental, as well as non-environmental, statutory and regulatory requirements. The Company did not record any conditional asset retirement obligation liabilities during the three months ended March 31, 2024 and 2023, 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 March 31, 2024, the Company held two cash accounts at a single financial institution with combined balances that exceeded the FDIC limit by $2,592,582. As of December 31, 2023, the Company held two cash accounts at a single financial institution with combined balances that exceeded the FDIC limit by $1,366,872. 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 March 31, 2024 and December 31, 2023, the Company reported $247,983 and $260,898, respectively, in security deposits held as restricted cash. Escrow deposits are restricted cash balances held by lenders for real estate taxes and insurance premiums. As of March 31, 2024 and December 31, 2023, the Company reported $217,000 and $191,139, respectively, in escrow deposits. Capital reserves are restricted cash balances held by lenders for capital improvements, leasing commissions and tenant improvements. As of March 31, 2024 and December 31, 2023, the Company reported $1,034,051 and $1,122,965, respectively, in capital property reserves. March 31, 2024 December 31, Property and Purpose of Reserve (unaudited) 2023 Ashley Plaza Property - maintenance and leasing cost reserve 459,914 439,404 Brookfield Center Property – maintenance and leasing cost reserve 102,573 91,491 Franklin Square Property – leasing costs 471,564 441,360 Hanover Square Property – operating reserve — 150,710 Total $ 1,034,051 $ 1,122,965 |
Share Retirement | Share Retirement ASC 505-30-30-8 provides guidance on accounting for share retirement and establishes two alternative methods for accounting for the repurchase price paid in excess of par value. The Company has elected the method by which the excess between par value and the repurchase price, including costs and fees, is recorded to additional paid in capital on the Company’s condensed consolidated balance sheets. The Company did not engage in any share repurchases or retirements during the three months ended March 31, 2024 and 2023. |
Revenue Recognition | Revenue Recognition Retail, Flex Center and STNL Property Revenues The Company recognizes minimum rents from its retail center properties, flex center properties and STNL properties on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset being recorded on the condensed consolidated balance sheets. As of March 31, 2024 and December 31, 2023, the Company reported $1,017,128 and $1,109,782, respectively, in unbilled rent. The Company’s leases generally require the tenant to reimburse the Company for a substantial portion of its expenses incurred in operating, maintaining, repairing, insuring and managing the shopping center and common areas (collectively defined as Common Area Maintenance or “CAM” expenses). The Company includes these reimbursements, along with other revenue derived from late fees and seasonal events, on the condensed consolidated statements of operations under the captions "Retail center property revenues”, “Flex center property revenues”, and “Single tenant net lease asset revenues”. (See Recent Accounting Pronouncements, below.) This significantly reduces the Company’s exposure to increases in costs and operating expenses resulting from inflation or other outside factors. The Company accrues reimbursements from tenants for recoverable portions of all these expenses as revenue in the period the applicable expenditures are incurred. The Company calculates the tenant’s share of operating costs by multiplying the total amount of the operating costs by a fraction, the numerator of which is the total number of square feet being leased by the tenant, and the denominator of which is the average total square footage of all leasable buildings at the property. The Company also receives payments for these reimbursements from substantially all its tenants on a monthly basis throughout the year. The Company recognizes differences between previously estimated recoveries and the final billed amounts in the year in which the amounts become final. Since these differences are determined annually under the leases and accrued as of December 31 in the year earned, no such revenues were recognized during the three months ended March 31, 2024 and 2023. 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, any unrecovered intangibles and other assets are written off as a loss on impairment. (See Impairment, above.) The Company did not receive any lease termination fees during the three months ended March 31, 2024 and 2023. |
Management Restructuring Expenses | Management Restructuring Expenses |
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 March 31, 2024 and December 31, 2023, the Company’s allowance for uncollectible rent totaled $23,694 and $13,413, 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 March 31, 2024 and December 31, 2023, 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. Management has evaluated the effect of the guidance provided by GAAP on Accounting for Uncertainty of Income Taxes |
Use of Estimates | Use of Estimates The Company has made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and revenues and expenses during the reported period. The Company’s actual results could differ from these estimates. |
Noncontrolling Interests | Noncontrolling Interests The ownership interests not held by the REIT are considered noncontrolling interests. There are three elements of noncontrolling interests in the capital structure of the Company. These noncontrolling interests have been reported in equity on the condensed consolidated balance sheets but separate from the Company’s equity. On the condensed consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. The Company’s condensed consolidated statements of changes in stockholders’ equity includes beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity. The first noncontrolling interest is in the Hanover Square Property (consisting of both the Hanover Square Shopping Center and the Hanover Square Outparcel) in which the Company owned an 84% tenancy in common interest through its subsidiary and an outside party owned a 16% tenancy in common interest, prior to the Hanover Square Transactions. Prior to the Hanover Square Transactions, the Hanover Square Property’s net income (loss) is allocated to the noncontrolling ownership interest based on its 16% ownership. During the three months ended March 31, 2024, 16% of the Hanover Square Property’s net income of $2,857,400 or $457,184 $7,755 $1,241 The second 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 three months ended March 31, 2024, 18% of the Parkway Property's net income of $36,453 or $6,562 was allocated to the noncontrolling ownership interest. During the three months ended March 31, 2023, 18% of the Parkway Property’s net loss of $46,482 or $8,367, was allocated to the noncontrolling ownership interest. The third noncontrolling ownership interest consists of the common units of the Operating Partnership (the “Operating Partnership Units”) that are not held by the REIT. In 2017, 15,625 Operating Partnership Units were issued in a 721 exchange, which allows the exchange of interests in real property for units in the operating partnership of a real estate investment trust. The members of a selling limited liability company invested $1,175,000 in the Operating Partnership in exchange for 15,625 Operating Partnership Units. Additionally, effective on January 1, 2020, 11,731 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, a property that was formerly owned by the Company. On August 31, 2020, a holder of Operating Partnership Units converted 665 Operating Partnership Units into shares of the Company’s common stock, $0.01 par value per share (“Common Shares”). On January 18, 2024, the Company issued 38,697 Operating Partnership Units to Francis P. Kavanaugh, representing a portion of his 2024 compensation. On February 16, 2024, the Company redeemed for cash the 11,731 Operating Partnership Units that were issued to the Hampton Inn Property noncontrolling owner. On March 27, 2024, the Company issued 417,391 Operating Partnership Units as consideration for the purchase of the Citibank Property. As of March 31, 2024 and December 31, 2023, there were 471,048 and 26,691 Operating Partnership Units outstanding, respectively, not held by the REIT. As of March 31, 2024 and December 31, 2023, respectively, 14,960 and 26,691 of the Operating Partnership Units not held by the REIT were convertible to Common Shares. Outstanding Operating Partnership Units have been adjusted for the Reverse Stock Split (as defined below). (See Note 7, below). The Operating Partnership Units not held by the REIT represent 17.40% and 1.19% of the outstanding Operating Partnership Units as of the three months ended March 31, 2024 and 2023, respectively. The noncontrolling interest percentage is calculated at any point in time by dividing the number of Operating Partnership Units not owned by the Company by the total number of Operating Partnership 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 Operating Partnership Units are exchanged for the Company’s $0.01 par value per share Common Shares. 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 Operating Partnership Unit holders based on their ownership interest. During the three months ended March 31, 2024, a weighted average of 4.40% of the Operating Partnership’s net income of $2,538,177 , $111,757 , % $243,989 , or $2,903 , |
Reclassifications | Reclassifications Operating Segments previously previously Outstanding Shares All per share amounts, Common Shares outstanding, Operating Partnership Units outstanding, and stock-based compensation amounts for all periods presented reflect our one-for-eight |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Upcoming Accounting Pronouncements Improvements to Reportable Segment Disclosures Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures |
Evaluation of the Company's Ability to Continue as a Going Concern | Evaluation of the Company’s Ability to Continue as a Going Concern Under the accounting guidance related to the presentation of financial statements, the Company is required to evaluate, on a quarterly basis, whether or not the entity’s current financial condition, including its sources of liquidity at the date that the condensed consolidated financial statements are issued, will enable the entity to meet its obligations as they come due arising within one year of the date of the issuance of the Company’s condensed consolidated financial statements and to make a determination as to whether or not it is probable, under the application of this accounting guidance, that the entity will be able to continue as a going concern. The Company’s condensed consolidated financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The redemption date of the Company’s mandatorily redeemable preferred stock is February 19, 2025 (the “Redemption Date”). The Company will require additional liquidity to fund the redemption. The Company expects to be able to generate this liquidity from a number of sources, including cash on hand, forecasted future cash flows for the periods prior to the Redemption Date, and careful management of the Company’s capital expenditures during the periods prior to the Redemption Date. 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) | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Significant Accounting Policies | |
Schedule of net intangible assets and liabilities | March 31, 2024 (unaudited) December 31, 2023 Intangible Assets, net Leasing commissions $ 932,217 $ 912,040 Legal and marketing costs 97,889 104,791 Above market leases 91,472 106,907 Net leasehold asset 1,653,356 1,592,808 $ 2,774,934 $ 2,716,546 Intangible Liabilities, net Below market leases $ (1,885,210) $ (1,865,310) |
Schedule of adjustments to rental revenue related to the above and below market leases | For the three months ended March 31, 2024 2023 (unaudited) (unaudited) Amortization of above market leases $ (15,434) $ (27,343) Amortization of below market leases 79,856 100,361 $ 64,422 $ 73,018 |
Schedule of amortization related to intangible assets | For the three months ended March 31, 2024 2023 (unaudited) (unaudited) Leasing commissions $ (46,507) $ (56,618) Legal and marketing costs (11,846) (16,205) Net leasehold asset (113,662) (172,044) $ (172,015) $ (244,867) |
Schedule of future amortization of above and below market leases | For the remaining nine months ending December 31, 2024 2025 2026 2027 2028 2029-2041 Total Intangible Assets Leasing commissions $ 129,836 $ 154,496 $ 116,510 $ 97,592 $ 76,167 $ 357,616 $ 932,217 Legal and marketing costs 25,593 24,456 13,842 8,599 5,886 19,513 97,889 Above market leases 25,416 21,292 15,629 14,543 10,114 4,478 91,472 Net leasehold asset 288,837 318,667 223,495 177,171 128,963 516,223 1,653,356 $ 469,682 $ 518,911 $ 369,476 $ 297,905 $ 221,130 $ 897,830 $ 2,774,934 Intangible Liabilities Below market leases, net $ (216,355) $ (227,108) $ (192,535) $ (175,625) $ (153,615) $ (919,972) $ (1,885,210) |
Schedule of property and purpose of reserve | March 31, 2024 December 31, Property and Purpose of Reserve (unaudited) 2023 Ashley Plaza Property - maintenance and leasing cost reserve 459,914 439,404 Brookfield Center Property – maintenance and leasing cost reserve 102,573 91,491 Franklin Square Property – leasing costs 471,564 441,360 Hanover Square Property – operating reserve — 150,710 Total $ 1,034,051 $ 1,122,965 |
Investment Properties (Tables)
Investment Properties (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Schedule of investment properties | March 31, 2024 December 31, (unaudited) 2023 Land $ 14,733,611 $ 13,720,502 Site improvements 3,335,269 3,797,755 Buildings and improvements (1) 59,459,305 58,183,070 Investment properties at cost (2) 77,528,185 75,701,327 Less accumulated depreciation 11,222,557 11,123,951 Investment properties, net $ 66,305,628 $ 64,577,376 (1) Includes tenant improvements (both those acquired as part of the acquisition of the properties and those constructed after the acquisition of the properties), tenant incentives, 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 | March 31, 2024 December 31, (unaudited) 2023 Capitalized tenant improvements – acquisition cost allocation, net $ 2,416,009 $ 2,504,953 Capitalized tenant improvements incurred subsequent to acquisition, net 945,426 898,873 March 31, 2024 December 31, (unaudited) 2023 Capitalized leasing commissions, net $ 768,801 $ 759,677 |
Schedule of assets held for sale and liabilities associated with assets held for sale | March 31, 2024 December 31, (unaudited) 2023 Investment properties, net $ — $ 9,707,154 Total assets held for sale $ — $ 9,707,154 March 31, 2024 December 31, (unaudited) 2023 Mortgages payable, net $ — $ 9,588,888 Total liabilities associated with assets held for sale $ — $ 9,588,888 |
Schedule of operating results of hotel properties included in continuing operations | For the three months ended March 31, 2024 2023 (unaudited) (unaudited) Revenue Retail center property revenues $ 307,325 $ 331,437 Total Revenue 307,325 331,437 Operating Expenses Retail center property operating expenses 88,342 89,153 Depreciation and amortization — 76,176 Total Operating Expenses 88,342 165,329 Gain on disposal of investment properties 2,819,502 — Loss on extinguishment of debt 51,837 — Operating Income 2,986,648 166,108 Interest expense 129,248 173,863 Net Income (Loss) 2,857,400 (7,755) Less: Net income (loss) attributable to Hanover Square Property noncontrolling interests 457,184 (1,241) Less: Net income (loss) attributable to Operating Partnership noncontrolling interests 105,610 (78) Net Income (Loss) Attributable to Medalist Common Shareholders $ 2,294,606 $ (6,436) |
2024 Property Acquisitions | |
Schedule of fair values of assets acquired and liabilities assumed | NCI Interest in Hanover Square Citibank Outparcel Property Total Fair value of assets acquired: Investment property $ 100,891 (a) $ 2,298,373 (a) $ 2,399,264 Lease intangibles — 245,837 (b) 245,837 Below market leases — (99,756) (b) (99,756) Fair value of net assets acquired $ 100,891 (b) $ 2,444,454 (c) $ 2,545,345 Purchase consideration: Consideration paid with cash $ 100,891 (c) $ 44,454 (d) $ 145,345 Consideration paid with operating partnership units — 2,400,000 (e) 2,400,000 Total consideration $ 100,891 (d) $ 2,444,454 (f) $ 2,545,345 NCI Interest in Hanover Square Outparcel a. Represents the acquisition cost of the land acquired. Closing costs were allocated and added to the fair value of the tangible assets acquired. b. Represents the total acquisition cost of the land acquired at closing. c. Represents cash paid for closing costs. d. Represents the consideration paid for the acquisition cost of the assets acquired. Citibank Property a. Represents the fair value of the investment property acquired which includes land, buildings, site improvements and tenant improvements. The fair value was determined using the market approach, the cost approach, the income approach or a combination thereof. Closing costs were allocated and added to the fair value of the tangible assets acquired. b. Represents the fair value of lease intangibles. Lease intangibles include leasing commissions, leases in place, 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 for closing costs paid at closing or directly by the Company outside of closing. e. Represents issuance of 417,391 Operating Partnership Units at $5.75 per Operating Partnership Unit. See Note 7, 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) | 3 Months Ended |
Mar. 31, 2024 | |
Mandatorily Redeemable Preferred Stock | |
Schedule of mandatorily redeemable preferred stock | For the following periods during which 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 April 28, 2023 April 25, 2023 0.50 January 20, 2023 - April 20, 2023 November 1, 2023 October 30, 2023 0.50 April 21, 2023 - July 20, 2023 November 1, 2023 October 30, 2023 0.50 July 21, 2023 - October 20, 2023 February 6, 2024 February 2, 2024 0.50 October 21, 2023 - January 20, 2024 April 25, 2024 April 22, 2024 0.50 January 21, 2024 - April 21, 2024 |
Loans Payable (Tables)
Loans Payable (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Loans Payable | |
Schedule of mortgages payables, net | The Company’s mortgages payables, net consists of the following: March 31, Monthly Interest 2024 December 31, Property Payment Rate Maturity (unaudited) 2023 Franklin Square (a) Interest only 3.808 % December 2031 $ 13,250,000 $ 13,250,000 Ashley Plaza (b) $ 52,795 3.75 % September 2029 10,651,510 10,708,557 Brookfield Center (c) $ 22,876 3.90 % November 2029 4,547,770 4,571,410 Parkway Center (d) $ 28,161 Variable November 2031 4,856,285 4,870,403 Wells Fargo Mortgage Facility (e) $ 103,438 4.50 % June 2027 17,832,561 17,939,276 Unamortized issuance costs, net (543,106) (566,873) Total mortgages payable, net $ 50,595,020 $ 50,772,773 (a) The mortgage loan for the Franklin Square Property 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 mortgage loan 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 March 31, 2024 and December 31, 2023, the Company believes that it is compliant with these covenants. The Company has guaranteed the payment and performance of the obligations of the mortgage loan. (b) 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 of its term. 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. Effective on December 26, 2023, the Company assumed certain guaranty obligations under the Ashley Plaza Property mortgage loan related to the Guaranty Substitution (see below). These obligations include covenants for the Company to maintain a net worth of $11,400,000 , excluding the liabilities associated with the mortgage loan for the Ashley Plaza Property, and for the Company to maintain liquid assets of no less than $1,140,000 . As of March 31, 2024 and December 31, 2023, the Company believes that it is compliant with these covenants. (c) The mortgage loan for the Brookfield Center Property bears interest at a fixed rate of 3.90 % and was interest only for the first twelve months of the term. 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. Effective on December 26, 2023, the Company assumed certain guaranty obligations under the Brookfield Center Property mortgage loan related to the Guaranty Substitution (see below). These obligations include covenants for the Company to maintain a net worth of $4,850,000 , excluding the liabilities associated with the mortgage loan for the Brookfield Center Property, and for the Company to maintain liquid assets of no less than $485,000 . As of March 31, 2024 and December 31, 2023, the Company believes that it is compliant with these covenants. (d) The interest rate for the mortgage loan for the Parkway Property was originally based on ICE LIBOR plus 225 basis points, with a minimum rate of 2.25 %. After the discontinuation of LIBOR on June 30, 2023, the ICE LIBOR index was replaced by Term SOFR, with an adjusted margin of 236.44 basis points. Under the terms of the mortgage, the interest rate payable each month shall not change by greater than 1 % during any six-month period and 2 % during any 12-month period. As of March 31, 2024 and December 31, 2023 the rate in effect for the Parkway Property mortgage was 7.05 %. 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. The mortgage loan for the Parkway Property includes a covenant to maintain a debt service coverage ratio of not less than 1.30 to 1.00 on an annual basis . As of March 31, 2024 and December 31, 2023, the Company believes that it is compliant with this covenant. (e) 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. 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 combined minimum debt yield of 9.5% on the Salisbury Marketplace Property, the Lancer Center Property and the Greenbrier Business Center Property, and the maintenance of liquid assets of not less than $1,500,000 . As of March 31, 2024 and December 31, 2023, the Company believes that it is compliant with these covenants. |
Schedule of interest expense, including amortization of capitalized issuance costs and payments received from the Company's interest rate protection transactions for the Hampton Inn Property and Clemson Best Western Property | For the three months ended March 31, 2024 (unaudited) Amortization Interest rate Mortgage of discounts and protection Other Interest capitalized transaction interest Expense issuance costs payments expense Total Franklin Square $ 127,541 $ 7,093 $ — $ — $ 134,634 Hanover Square 129,248 — — — 129,248 Ashley Plaza 101,156 4,358 — — 105,514 Brookfield Center 44,988 2,837 — — 47,825 Parkway Center 85,675 2,757 (20,787) — 67,645 Wells Fargo Mortgage Facility 203,598 6,722 — — 210,320 Wells Fargo Line of Credit — — — 15,144 15,144 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 64,126 — 100,000 164,126 Other interest — — — 2,292 2,292 Total interest expense $ 692,206 $ 87,893 $ (20,787) $ 117,436 $ 876,748 For the three months ended March 31, 2023 (unaudited) Amortization Interest rate Mortgage of discounts and protection Other Interest capitalized transaction interest Expense issuance costs payments expense Total Franklin Square $ 126,140 7,093 $ — — $ 133,233 Hanover Square 170,640 3,223 — — 173,863 Ashley Plaza 102,133 4,357 — — 106,490 Brookfield Center 45,391 2,838 — — 48,229 Parkway Center 47,257 2,757 (19,342) — 30,672 Wells Fargo Mortgage Facility 206,039 6,722 — — 212,761 Amortization and preferred stock dividends on mandatorily redeemable preferred stock — 58,804 — 100,000 158,804 Total interest expense $ 697,600 $ 85,794 $ (19,342) $ 100,000 $ 864,052 |
Schedule of interest accrued and accumulated amortization of capitalized issuance costs | As of March 31, 2024 (unaudited) As of December 31, 2023 Accumulated Accumulated amortization of amortization Accrued capitalized Accrued of capitalized interest issuance costs interest issuance costs Franklin Square $ 43,448 $ 66,201 $ 43,448 $ 59,108 Hanover Square — — 55,755 71,696 Ashley Plaza 34,396 79,897 34,580 75,539 Brookfield Center — 51,081 — 48,244 Parkway Center 28,531 26,647 28,614 23,890 Wells Fargo Mortgage Facility — 47,053 — 40,331 Amortization and accrued preferred stock dividends on mandatorily redeemable preferred stock 70,004 (1) 896,819 70,004 (1) 832,693 Total $ 176,379 $ 1,167,698 $ 232,401 $ 1,151,501 (1) Recorded as accrued interest under accounts payable and accrued liabilities on the Company’s condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively. |
Schedule of Company's mortgages payables, net, associated with assets held for sale | Balance March 31, Monthly Interest 2024 December 31, Property Payment Rate Maturity (unaudited) 2023 Hanover Square (a) $ 78,098 6.94 % December 2027 — 9,640,725 Unamortized issuance costs, net — (51,837) Total mortgages payable, net, associated with assets held for sale $ — $ 9,588,888 (a) 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 included interest at the fixed rate, and principal, based on a twenty-five-year amortization schedule. On March 13, 2024, the Company sold the Hanover Square Shopping Center Property and repaid the mortgage loan for the Hanover Square Property. |
Schedule of principal repayments on indebtedness | Mortgages Payable For the remaining nine months ending December 31, 2024 $ 612,808 2025 1,091,730 2026 1,139,886 2027 17,280,528 2028 721,207 Thereafter 30,291,967 Total principal payments and debt maturities 51,138,126 Less unamortized issuance costs (543,106) Net principal payments and debt maturities $ 50,595,020 |
Rentals under Operating Leases
Rentals under Operating Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Rentals under Operating Leases | |
Schedule of future minimum rentals to be received under noncancelable tenant 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 March 31, 2024 are as follows: For the remaining nine months ending December 31, 2024 $ 5,424,102 2025 6,656,905 2026 4,913,650 2027 3,981,719 2028 3,238,444 Thereafter 7,136,356 Total minimum rents $ 31,351,176 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity | |
Schedule of earnings (loss) per common share | Three months ended March 31, 2024 2023 (unaudited) (unaudited) Basic and diluted shares outstanding Weighted average Common Shares – basic 2,233,182 2,219,803 Effect of conversion of Operating Partnership Units 14,960 26,691 Weighted average Common Shares – diluted 2,248,142 2,246,494 Calculation of earnings per share – basic and diluted Net loss attributable to common shareholders $ (1,221,295) Weighted average Common Shares – basic and diluted 2,219,803 Loss per share – basic and diluted $ (0.55) Calculation of earnings per share – basic Net income attributable to common shareholders $ 1,357,398 Weighted average Common Shares – basic 2,233,182 Earnings per share – basic $ 0.61 Calculation of earnings per share – diluted Net income attributable to common shareholders $ 1,357,398 Weighted average Common Shares – diluted 2,248,142 Earnings per share – diluted $ 0.60 |
Schedule of dividends and distributions to common shareholders and noncontrolling interests | Three months ended March 31, 2024 2023 (unaudited) (unaudited) Common shareholders (dividends) $ 22,341 $ 176,810 Hanover Square Property noncontrolling interest (distributions) 479,856 — Parkway Property noncontrolling interest (distributions) 8,100 — Operating Partnership Unit holders (distributions) 653 2,135 Total dividends and distributions $ 510,950 $ 178,945 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Information | |
Schedule of property operating revenues, expenses and NOI by product type | The following table presents property operating revenues, expenses and NOI by product type: For the three months ended March 31, Retail center properties Flex center properties STNL properties Total 2024 2023 2024 2023 2024 2023 2024 2023 Revenues $ 1,849,617 $ 1,835,373 $ 664,067 $ 569,297 $ 57,955 $ 56,306 $ 2,571,639 $ 2,460,976 Operating expenses 428,259 512,887 144,673 176,737 7,708 7,728 580,640 697,352 Bad debt expense — 125 14,056 26,997 — — 14,056 27,122 Net operating income $ 1,421,358 $ 1,322,361 $ 505,338 $ 365,563 $ 50,247 $ 48,578 $ 1,976,943 $ 1,736,502 |
Organization and Basis of Pre_2
Organization and Basis of Presentation and Consolidations (Details) | Mar. 26, 2024 | Mar. 25, 2024 | Mar. 31, 2024 ft² a property | Mar. 28, 2024 a ft² | Mar. 13, 2024 ft² a | Mar. 31, 2023 |
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Number of properties owned | property | 10 | |||||
Area of building | 4,350 | |||||
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% | ||||
Retail center properties | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Number of properties owned | property | 4 | |||||
Flex center property | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Number of properties owned | property | 3 | |||||
Single tenant net lease property revenues | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Number of properties owned | property | 3 | |||||
Undeveloped properties | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Number of undeveloped properties owned | property | 3 | |||||
Greenbrier Business Center Property | Flex center property | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 89,280 | |||||
Lancer Center Shopping Center | Retail center properties | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 181,590 | |||||
Franklin Square Property | Retail center properties | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 134,239 | |||||
Hanover Square Property | Retail center properties | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 73,440 | |||||
Hanover Square Property | Retail center properties | Hanover Square Property | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Percentage by parent | 84% | |||||
Ownership percentage by noncontrolling owners | 16% | |||||
Hanover Square Outparcel | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Ownership percentage | 16% | |||||
Hanover Square Outparcel | Retail center properties | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of land | a | 0.864 | |||||
Ownership percentage | 16% | 16% | ||||
Hanover Square Outparcel | Undeveloped properties | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of land | a | 0.86 | |||||
Citibank Property | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of land | a | 0.45 | |||||
Citibank Property | Single tenant net lease property revenues | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 4,350 | |||||
Area of land | a | 0.45 | |||||
East Coast Wings Property | Single tenant net lease property revenues | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 5,000 | |||||
Area of land | a | 0.89 | |||||
T-Mobile Property | Single tenant net lease property revenues | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 3,000 | |||||
Area of land | a | 0.78 | |||||
Lancer Outparcel | Undeveloped properties | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | a | 1.80 | |||||
Salisbury Outparcel | Undeveloped properties | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | a | 1.20 | |||||
Ashley Plaza Property | Retail center properties | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 156,012 | |||||
Brookfield Center Property | Flex center property | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 64,880 | |||||
Parkway Property | Flex center property | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 64,109 | |||||
Parkway Property | Flex center property | Parkway Property | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Percentage by parent | 82% | |||||
Ownership percentage by noncontrolling owners | 18% | |||||
Salisbury Marketplace Property | Retail center properties | ||||||
Organization And Basis Of Presentation And Consolidation [Line Items] | ||||||
Area of building | 79,732 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Investment Properties, Assets Held for Sale and Intangible Assets and Liabilities, net (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Real Estate [Line Items] | |||
Number tenants defaulted | 1 | ||
Loss on impairment | $ 0 | $ (26,896) | |
Accumulated amortization of lease origination costs, leases in place and legal and marketing costs | 2,254,058 | $ 2,204,404 | |
Write off of fully amortized intangible assets | 122,360 | $ 273,252 | |
Write Off amortization of tenant defaults | $ 0 | $ 21,407 | |
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_5
Summary of Significant Accounting Policies - Intangible Assets and Liabilities, net (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Intangible Assets, net | ||
Intangible assets, net | $ 2,774,934 | $ 2,716,546 |
Intangible Liabilities, net | ||
Below market leases | (1,885,210) | (1,865,310) |
Leasing commissions | ||
Intangible Assets, net | ||
Intangible assets, net | 932,217 | 912,040 |
Legal and marketing costs | ||
Intangible Assets, net | ||
Intangible assets, net | 97,889 | 104,791 |
Above market leases | ||
Intangible Assets, net | ||
Intangible assets, net | 91,472 | 106,907 |
Net leasehold asset | ||
Intangible Assets, net | ||
Intangible assets, net | $ 1,653,356 | $ 1,592,808 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Rental Revenue Related to Above and Below Market Leases (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ (172,015) | $ (244,867) |
Amortization of below market leases | 79,856 | 100,361 |
Amortization of above and below market leases | 64,422 | 73,018 |
Above market leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ (15,434) | $ (27,343) |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Related to Intangible Assets (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ (172,015) | $ (244,867) |
Leasing commissions | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | (46,507) | (56,618) |
Legal and marketing costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | (11,846) | (16,205) |
Net leasehold asset | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ (113,662) | $ (172,044) |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Future Amortization of Above and Below Market Leases (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Intangible Assets, net | ||
For the remaining nine months ending December 31, 2024 | $ 469,682 | |
2025 | 518,911 | |
2026 | 369,476 | |
2027 | 297,905 | |
2028 | 221,130 | |
2029-2041 | 897,830 | |
Intangible assets, net | 2,774,934 | $ 2,716,546 |
Intangible Liabilities, net | ||
For the remaining nine months ending December 31, 2024 | (216,355) | |
2025 | (227,108) | |
2026 | (192,535) | |
2027 | (175,625) | |
2028 | (153,615) | |
2029 - 2041 | (919,972) | |
Below market leases | (1,885,210) | (1,865,310) |
Leasing commissions | ||
Intangible Assets, net | ||
For the remaining nine months ending December 31, 2024 | 129,836 | |
2025 | 154,496 | |
2026 | 116,510 | |
2027 | 97,592 | |
2028 | 76,167 | |
2029-2041 | 357,616 | |
Intangible assets, net | 932,217 | 912,040 |
Legal and marketing costs | ||
Intangible Assets, net | ||
For the remaining nine months ending December 31, 2024 | 25,593 | |
2025 | 24,456 | |
2026 | 13,842 | |
2027 | 8,599 | |
2028 | 5,886 | |
2029-2041 | 19,513 | |
Intangible assets, net | 97,889 | 104,791 |
Above market leases | ||
Intangible Assets, net | ||
For the remaining nine months ending December 31, 2024 | 25,416 | |
2025 | 21,292 | |
2026 | 15,629 | |
2027 | 14,543 | |
2028 | 10,114 | |
2029-2041 | 4,478 | |
Intangible assets, net | 91,472 | 106,907 |
Net leasehold asset | ||
Intangible Assets, net | ||
For the remaining nine months ending December 31, 2024 | 288,837 | |
2025 | 318,667 | |
2026 | 223,495 | |
2027 | 177,171 | |
2028 | 128,963 | |
2029-2041 | 516,223 | |
Intangible assets, net | $ 1,653,356 | $ 1,592,808 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Exceeded the FDIC limit | $ 2,592,582 | $ 1,366,872 |
Security deposits | 247,983 | 260,898 |
Escrow deposits | 217,000 | 191,139 |
Capital property reserves | 1,034,051 | $ 1,122,965 |
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 ($) | Mar. 31, 2024 | Dec. 31, 2023 |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||
Capital property reserves | $ 1,034,051 | $ 1,122,965 |
Ashley Plaza 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 | 459,914 | |
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 | 471,564 | |
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 | $ 102,573 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Share Retirement (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Common Stock | ||
Common stock repurchases | $ 0 | $ 0 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Revenue Recognition (Details) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Summary of Significant Accounting Policies | |||
Unbilled rent | $ 1,017,128 | $ 1,109,782 | |
Number tenants defaulted | 1 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Revenue Recognition (Details) | 3 Months Ended | ||
Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Summary of Significant Accounting Policies | |||
Unbilled rent | $ 1,017,128 | $ 1,109,782 | |
Revenue recognized from the reimbursement of common area maintenance expense | 0 | $ 0 | |
Number tenants defaulted | 1 | ||
Lease termination fee income recognized | $ 0 | $ 0 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Management Restructuring Expenses (Details) - USD ($) | 3 Months Ended | ||
Jul. 18, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Accounting Policies [Line Items] | |||
Management restructuring expenses | $ 0 | $ 241,450 | |
Medalist Fund Manager, Inc. | Termination agreement | Related Party | |||
Accounting Policies [Line Items] | |||
Amounts payable related to termination of the Management Agreement | $ 1,602,717 | ||
Termination fee payable | 1,250,000 | ||
Acquisition fee accrued | $ 352,717 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||||||||||
Mar. 28, 2024 shares | Mar. 27, 2024 shares | Feb. 16, 2024 shares | Jan. 18, 2024 shares | Jan. 01, 2024 item | May 03, 2023 | Aug. 31, 2020 $ / shares shares | Jan. 01, 2020 shares | Mar. 31, 2024 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) shares | Dec. 31, 2017 USD ($) Partnership | |
Accounting Policies [Line Items] | ||||||||||||
Allowance for uncollectible tenant receivables | $ 23,694 | $ 13,413 | ||||||||||
Percentage of taxable income required to be distributed to shareholders | 90% | |||||||||||
Loss on impairment | $ 0 | $ (36,743) | ||||||||||
Loss on impairment of tangible assets | 0 | |||||||||||
Loss on impairment | 0 | $ 26,896 | ||||||||||
Legal expense | 241,450 | |||||||||||
Loss on impairment | 0 | 1,192,000 | ||||||||||
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 | 11,731 | |||||||||||
Net (loss) income | $ 1,932,901 | (1,233,806) | ||||||||||
Noncontrolling Operating Partnership Units | Partnership | 15,625 | |||||||||||
Number of Operating Partnership units into shares of Common Stock | shares | 665 | |||||||||||
Non-controlling operating partnership units issued for compensation services | shares | 38,697 | |||||||||||
Partnership units, convertible into common shares | shares | 14,960 | 26,691 | ||||||||||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||||||
Less: Net income (loss) attributable to Operating Partnership noncontrolling interests | $ 111,757 | (2,903) | ||||||||||
Operating Partnership units outstanding | shares | 471,048 | 26,691 | ||||||||||
Conversion ratio | 0.125 | |||||||||||
Total Revenue | $ 2,571,639 | 2,460,976 | ||||||||||
Single tenant net lease property operating expenses | 7,708 | 7,728 | ||||||||||
Retail center property operating expenses | 428,259 | 512,887 | ||||||||||
Noncontrolling Limited Partner | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Redemption of operating partnership units | shares | 11,731 | |||||||||||
Single tenant net lease property revenues | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Number of parcels | item | 2 | |||||||||||
Greenbrier Business Center Property | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Loss on impairment of tangible assets | (8,655) | |||||||||||
Hanover Square Property | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Net (loss) income | 2,857,400 | (7,755) | ||||||||||
Less: Net income (loss) attributable to Operating Partnership noncontrolling interests | 105,610 | (78) | ||||||||||
Total Revenue | 307,325 | 331,437 | ||||||||||
Retail center property operating expenses | 88,342 | 89,153 | ||||||||||
Hanover Square Property | Noncontrolling Interests | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Net (loss) income | 457,184 | (1,241) | $ 457,184 | |||||||||
Parkway Property | Noncontrolling Interests | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Net (loss) income | 6,562 | (8,367) | ||||||||||
Hanover Square Property | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Net (loss) income | 2,857,400 | (7,755) | ||||||||||
Parkway Property | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Net (loss) income | 36,453 | (46,482) | ||||||||||
Operating Partnership | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Net (loss) income | 2,538,177 | (243,989) | ||||||||||
Operating Partnership | Noncontrolling Interests | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Net (loss) income | $ 111,757 | $ (2,903) | ||||||||||
Percentage of outstanding operating partnership units | 17.40% | 1.19% | ||||||||||
Weighted average of net income (loss) allocated to noncontrolling unit holders | 0.0440 | 0.0119 | ||||||||||
Operating Partnership | Related Party | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Investment of non-controlling owner | $ 1,175,000 | |||||||||||
Single tenant net lease property revenues | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Total Revenue | $ 57,955 | $ 56,306 | ||||||||||
Single tenant net lease property operating expenses | 7,728 | |||||||||||
Retail center property revenues | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Total Revenue | 1,849,617 | 1,835,373 | ||||||||||
Retail center property revenues | Previously Reported | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Total Revenue | 56,306 | |||||||||||
Retail center property operating expenses | 7,728 | |||||||||||
Retail center property revenues | Hanover Square Property | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Total Revenue | $ 307,325 | $ 331,437 | ||||||||||
Ashley Plaza Property | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Number of parcels | item | 3 | |||||||||||
Citibank Property | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Number of operating partnership units issued | shares | 417,391 | 417,391 | ||||||||||
Hanover Square Property | ||||||||||||
Accounting Policies [Line Items] | ||||||||||||
Percentage by parent | 84% | |||||||||||
Ownership percentage by noncontrolling owners | 16% | 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 | $ (8,367) | $ 6,562 |
Investment Properties - Investm
Investment Properties - Investment Properties (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Real Estate [Line Items] | ||
Investment properties at cost | $ 77,528,185 | $ 75,701,327 |
Less accumulated depreciation | 11,222,557 | 11,123,951 |
Investment properties, net | 66,305,628 | 64,577,376 |
Land | ||
Real Estate [Line Items] | ||
Investment properties at cost | 14,733,611 | 13,720,502 |
Site improvements | ||
Real Estate [Line Items] | ||
Investment properties at cost | 3,335,269 | 3,797,755 |
Buildings and improvements | ||
Real Estate [Line Items] | ||
Investment properties at cost | $ 59,459,305 | $ 58,183,070 |
Investment Properties - Deferre
Investment Properties - Deferred costs, net of depreciation (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Capitalized leasing commissions, net | $ 768,801 | $ 759,677 |
Capitalized tenant improvements - acquisition cost allocation, net | ||
Capitalized tenant improvements, net | 2,416,009 | 2,504,953 |
Capitalized tenant improvements incurred subsequent to acquisition, net | ||
Capitalized tenant improvements, net | $ 945,426 | $ 898,873 |
Investment Properties - Additio
Investment Properties - Additional Information (Details) | 3 Months Ended | ||||
Mar. 28, 2024 USD ($) a ft² | Mar. 25, 2024 USD ($) | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Real Estate [Line Items] | |||||
Depreciation expense | $ 840,461 | $ 911,481 | |||
Capitalized tenant improvements | 110,630 | 377,265 | |||
Amortization of lease incentives | 741 | 0 | |||
Capitalized tenant improvements written off | 0 | 8,656 | |||
Capitalized leasing commissions | 54,963 | 90,637 | |||
Depreciation on capitalized leasing commissions | 45,839 | 31,930 | |||
Area of building | ft² | 4,350 | ||||
Assets held for sale | $ 9,707,154 | ||||
Capitalized loan issuance costs | 543,106 | $ 566,873 | |||
Hanover Square Outparcel [Member] | |||||
Real Estate [Line Items] | |||||
Total investment | $ 100,891 | ||||
Acquisition and closing costs | $ 2,480 | ||||
Ownership percentage | 16% | ||||
Citibank Property | |||||
Real Estate [Line Items] | |||||
Percentage of property leased | 100% | ||||
Total investment | $ 2,444,454 | ||||
Acquisition and closing costs | $ 44,454 | ||||
Area of Land | a | 0.45 | ||||
Investment property | |||||
Real Estate [Line Items] | |||||
Depreciation expense | 840,461 | 911,481 | |||
Capitalized tenant improvements - acquisition cost allocation, net | |||||
Real Estate [Line Items] | |||||
Depreciation on capitalized tenant improvements | 136,155 | 172,888 | |||
Tenant improvements due to acquisitions | 0 | ||||
Capitalized tenant improvements - acquisition cost allocation, net | Citibank Property | |||||
Real Estate [Line Items] | |||||
Tenant improvements due to acquisitions | 47,211 | ||||
Capitalized tenant improvements incurred subsequent to acquisition, net | |||||
Real Estate [Line Items] | |||||
Depreciation on capitalized tenant improvements | $ 64,077 | $ 32,265 |
Investment Properties - Assets
Investment Properties - Assets held for sale and liabilities associated with assets held for sale (Details) | Dec. 31, 2023 USD ($) |
Long Lived Assets Held-for-sale [Line Items] | |
Total assets held for sale | $ 9,707,154 |
Total liabilities associated with assets held for sale | 9,588,888 |
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 | 9,588,888 |
Investment properties | |
Long Lived Assets Held-for-sale [Line Items] | |
Total assets held for sale | $ 9,707,154 |
Investment Properties - 2024 Ac
Investment Properties - 2024 Acquisition (Details) | 3 Months Ended | ||||
Mar. 28, 2024 USD ($) a ft² $ / shares shares | Mar. 27, 2024 shares | Mar. 25, 2024 USD ($) | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Real Estate [Line Items] | |||||
Investment property | $ 66,305,628 | $ 64,577,376 | |||
Purchase consideration: | |||||
Area Of Building | ft² | 4,350 | ||||
2024 Property Acquisitions | |||||
Real Estate [Line Items] | |||||
Investment property | 2,399,264 | ||||
Lease intangibles | 245,837 | ||||
Below market leases | (99,756) | ||||
Fair value of net assets acquired | 2,545,345 | ||||
Purchase consideration: | |||||
Consideration paid with cash | 145,345 | ||||
Consideration paid with new mortgage debt, net | 2,400,000 | ||||
Total consideration | $ 2,545,345 | ||||
Citibank Property | |||||
Real Estate [Line Items] | |||||
Investment property | $ 2,298,373 | ||||
Lease intangibles | 245,837 | ||||
Below market leases | (99,756) | ||||
Fair value of net assets acquired | 2,444,454 | ||||
Purchase consideration: | |||||
Consideration paid with cash | 44,454 | ||||
Consideration paid with new mortgage debt, net | $ 2,400,000 | ||||
Area of Land | a | 0.45 | ||||
Percentage of property leased | 100% | ||||
Purchase price paid | $ 2,400,000 | ||||
Number of operating partnership units issued | shares | 417,391 | 417,391 | |||
Price per unit of operating partnership units issued | $ / shares | $ 5.75 | ||||
Total consideration | $ 2,444,454 | ||||
Acquisition and closing costs | $ 44,454 | ||||
Hanover Square Outparcel | |||||
Real Estate [Line Items] | |||||
Investment property | $ 100,891 | ||||
Fair value of net assets acquired | 100,891 | ||||
Purchase consideration: | |||||
Consideration paid with cash | $ 100,891 | ||||
Ownership percentage | 16% | ||||
Consideration paid with cash | $ 98,411 | ||||
Total consideration | 100,891 | ||||
Acquisition and closing costs | $ 2,480 |
Investment Properties - Disposa
Investment Properties - Disposal of investment property (Details) - USD ($) | 3 Months Ended | ||
Mar. 13, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Real Estate [Line Items] | |||
Gain on disposal of investment property | $ 2,819,502 | ||
REVENUE | |||
Total Revenue | 2,571,639 | $ 2,460,976 | |
OPERATING EXPENSES | |||
Retail center property operating expenses | 428,259 | 512,887 | |
Depreciation and amortization | 1,012,476 | 1,156,348 | |
Total Operating Expenses | 2,574,544 | 2,801,692 | |
Gain on disposal of investment properties | 2,819,502 | ||
Loss on extinguishment of debt | 51,837 | ||
Operating Income | 2,764,760 | (340,716) | |
Interest expense | 876,748 | 864,052 | |
Net (loss) income | 1,932,901 | (1,233,806) | |
Net income (loss) attributable to Operating Partnership noncontrolling interests | 111,757 | (2,903) | |
Net Income (Loss) Attributable to Medalist Common Shareholders | 1,357,398 | (1,221,295) | |
Hanover Square Property | |||
Real Estate [Line Items] | |||
Proceeds from sale of property | $ 13,000,000 | ||
Credits for repairs | 85,000 | ||
Gain on disposal of investment property | 2,819,502 | 2,819,502 | |
REVENUE | |||
Total Revenue | 307,325 | 331,437 | |
OPERATING EXPENSES | |||
Retail center property operating expenses | 88,342 | 89,153 | |
Depreciation and amortization | 76,176 | ||
Total Operating Expenses | 88,342 | 165,329 | |
Gain on disposal of investment properties | $ 2,819,502 | 2,819,502 | |
Loss on extinguishment of debt | 51,837 | 0 | |
Operating Income | 2,986,648 | 166,108 | |
Interest expense | 129,248 | 173,863 | |
Net (loss) income | 2,857,400 | (7,755) | |
Net income (loss) attributable to noncontrolling interests | 457,184 | (1,241) | |
Net income (loss) attributable to Operating Partnership noncontrolling interests | 105,610 | (78) | |
Net Income (Loss) Attributable to Medalist Common Shareholders | 2,294,606 | (6,436) | |
Retail center property revenues | |||
REVENUE | |||
Total Revenue | 1,849,617 | 1,835,373 | |
Retail center property revenues | Hanover Square Property | |||
REVENUE | |||
Total Revenue | $ 307,325 | $ 331,437 |
Mandatorily Redeemable Prefer_3
Mandatorily Redeemable Preferred Stock (Details) - USD ($) | 3 Months Ended | |||||||||||||||||||
Apr. 25, 2024 | Feb. 06, 2024 | Nov. 01, 2023 | Apr. 28, 2023 | Jan. 27, 2023 | Oct. 20, 2022 | Jul. 21, 2022 | Apr. 21, 2022 | Jan. 20, 2022 | Oct. 27, 2021 | Jul. 26, 2021 | Apr. 30, 2021 | Feb. 01, 2021 | Oct. 26, 2020 | Jul. 24, 2020 | Apr. 27, 2020 | Feb. 19, 2020 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||||||||||||||||||
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 | $ 0.50 | $ 0.50 | $ 0.37 | ||||||
Legal Fees | $ 241,450 | |||||||||||||||||||
April 21, 2023 - July 20, 2023 | ||||||||||||||||||||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||||||||||||||||||
Dividends paid (in dollars per share) | $ 0.50 | |||||||||||||||||||
July 21, 2023 - October 20, 2023 | ||||||||||||||||||||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||||||||||||||||||
Dividends paid (in dollars per share) | $ 0.50 | |||||||||||||||||||
Mandatorily redeemable preferred stock. | ||||||||||||||||||||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||||||||||||||||||
Preferred stock issuances (shares) | 200,000 | |||||||||||||||||||
Price Per Share | $ 23 | |||||||||||||||||||
Gross proceeds | $ 4,600,000 | |||||||||||||||||||
Net proceeds of the redeemable preferred stock | $ 3,860,882 | |||||||||||||||||||
Preferred Stock, dividend rate (as a percent) | 8% | 8% | ||||||||||||||||||
Accrued but unpaid dividends | $ 70,004 | $ 70,004 | ||||||||||||||||||
Discount on stock issued (in dollars per share) | $ 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 | 64,126 | $ 58,804 | ||||||||||||||||||
Accumulated amortization of the discount and deferred financing costs | $ 896,819 | $ 832,693 | ||||||||||||||||||
Subsequent event | ||||||||||||||||||||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||||||||||||||||||
Dividends paid (in dollars per share) | $ 0.50 | |||||||||||||||||||
Subsequent event | Mandatorily redeemable preferred stock. | ||||||||||||||||||||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | ||||||||||||||||||||
Dividends paid (in dollars per share) | $ 0.50 |
Loans Payable - Mortgages Payab
Loans Payable - Mortgages Payables, Net (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Feb. 01, 2023 | Jan. 31, 2023 | Jun. 13, 2022 | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Jan. 01, 2023 | |
Loans Payable | |||||||
Less unamortized issuance costs | $ (543,106) | $ (566,873) | |||||
Mortgages Payable | |||||||
Loans Payable | |||||||
Less unamortized issuance costs | (543,106) | ||||||
Net principal payments and debt maturities | 50,595,020 | 50,772,773 | |||||
Franklin Square Property | |||||||
Loans Payable | |||||||
Mortgages payable | $ 13,250,000 | $ 13,250,000 | |||||
Franklin Square Property | Mortgages Payable | |||||||
Loans Payable | |||||||
Monthly Payment | Interest only | ||||||
Interest Rate | 3.808% | ||||||
Maturity | 2031-12 | 2031-12 | |||||
Hanover Square Property | Mortgages Payable | |||||||
Loans Payable | |||||||
Monthly Payment | $ 78,098 | $ 56,882 | |||||
Interest Rate | 4.25% | 6.94% | |||||
Ashley Plaza Property | |||||||
Loans Payable | |||||||
Mortgages payable | $ 10,651,510 | $ 10,708,557 | |||||
Ashley Plaza Property | Mortgages Payable | |||||||
Loans Payable | |||||||
Monthly Payment | $ 52,795 | ||||||
Interest Rate | 3.75% | ||||||
Maturity | 2029-09 | 2029-09 | |||||
Brookfield Center Property. | |||||||
Loans Payable | |||||||
Mortgages payable | $ 4,547,770 | $ 4,571,410 | |||||
Brookfield Center Property. | Mortgages Payable | |||||||
Loans Payable | |||||||
Monthly Payment | $ 22,876 | ||||||
Interest Rate | 3.90% | ||||||
Maturity | 2029-11 | 2029-11 | |||||
Parkway Property | |||||||
Loans Payable | |||||||
Maturity | 2031-11 | 2031-11 | |||||
Mortgages payable | $ 4,856,285 | $ 4,870,403 | |||||
Parkway Property | Mortgages Payable | |||||||
Loans Payable | |||||||
Monthly Payment | 28,161 | ||||||
Wells Fargo Mortgage Facility | |||||||
Loans Payable | |||||||
Mortgages payable | $ 17,832,561 | $ 17,939,276 | |||||
Wells Fargo Mortgage Facility | Mortgages Payable | |||||||
Loans Payable | |||||||
Monthly Payment | 103,438 | ||||||
Monthly Payment | $ 103,438 | ||||||
Interest Rate | 4.50% | 4.50% | |||||
Maturity | 2027-06 | 2027-06 |
Loans Payable - Mortgages pay_2
Loans Payable - Mortgages payable, net, associated with assets held for sale (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Loans Payable | ||
Unamortized issuance costs | $ (543,106) | $ (566,873) |
Total mortgages payable, net, associated with assets held for sale | 9,588,888 | |
Mortgages payable, net, associated with assets held for sale | ||
Loans Payable | ||
Total mortgages payable, net, associated with assets held for sale | 9,588,888 | |
Mortgages payable, net, associated with assets held for sale | Hanover Square Property | ||
Loans Payable | ||
Monthly Payment | $ 78,098 | |
Interest Rate | 6.94% | |
Mortgages payable | 9,640,725 | |
Unamortized issuance costs | (51,837) | |
Total mortgages payable, net, associated with assets held for sale | $ 9,588,888 |
Loans Payable - Interest expens
Loans Payable - Interest expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | $ 692,206 | $ 697,600 |
Amortization of discounts and capitalized issuance costs | 87,893 | 85,794 |
Interest rate protection transaction payments | 20,787 | 19,342 |
Other interest expense | 117,436 | 100,000 |
Total interest expense | 876,748 | 864,052 |
Wells Fargo Line of Credit | ||
Debt Instrument [Line Items] | ||
Other interest expense | 15,144 | |
Total interest expense | 15,144 | |
Amortization and preferred stock dividends on mandatorily redeemable preferred stock | ||
Debt Instrument [Line Items] | ||
Amortization of discounts and capitalized issuance costs | 64,126 | 58,804 |
Other interest expense | 100,000 | 100,000 |
Total interest expense | 164,126 | 158,804 |
Other interest | ||
Debt Instrument [Line Items] | ||
Other interest expense | 2,292 | |
Total interest expense | 2,292 | |
Franklin Square Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 127,541 | 126,140 |
Amortization of discounts and capitalized issuance costs | 7,093 | 7,093 |
Total interest expense | 134,634 | 133,233 |
Hanover Square Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 129,248 | 170,640 |
Amortization of discounts and capitalized issuance costs | 3,223 | |
Total interest expense | 129,248 | 173,863 |
Ashley Plaza Property | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 101,156 | 102,133 |
Amortization of discounts and capitalized issuance costs | 4,358 | 4,357 |
Total interest expense | 105,514 | 106,490 |
Brookfield Center Property. | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 44,988 | 45,391 |
Amortization of discounts and capitalized issuance costs | 2,837 | 2,838 |
Total interest expense | 47,825 | 48,229 |
Parkway Center | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 85,675 | 47,257 |
Amortization of discounts and capitalized issuance costs | 2,757 | 2,757 |
Interest rate protection transaction payments | 20,787 | (19,342) |
Total interest expense | 67,645 | 30,672 |
Wells Fargo Mortgage Facility | ||
Debt Instrument [Line Items] | ||
Mortgage Interest Expense | 203,598 | 206,039 |
Amortization of discounts and capitalized issuance costs | 6,722 | 6,722 |
Total interest expense | $ 210,320 | $ 212,761 |
Loans Payable - Interest accrue
Loans Payable - Interest accrued and accumulated amortization of capitalized issuance costs (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Accrued interest | $ 176,379 | $ 232,401 |
Accumulated amortization of capitalized issuance costs | 1,167,698 | 1,151,501 |
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 | 896,819 | 832,693 |
Franklin Square Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 43,448 | 43,448 |
Accumulated amortization of capitalized issuance costs | 66,201 | 59,108 |
Hanover Square Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 55,755 | |
Accumulated amortization of capitalized issuance costs | 71,696 | |
Ashley Plaza Property | ||
Debt Instrument [Line Items] | ||
Accrued interest | 34,396 | 34,580 |
Accumulated amortization of capitalized issuance costs | 79,897 | 75,539 |
Brookfield Center Property. | ||
Debt Instrument [Line Items] | ||
Accumulated amortization of capitalized issuance costs | 51,081 | 48,244 |
Parkway Center | ||
Debt Instrument [Line Items] | ||
Accrued interest | 28,531 | 28,614 |
Accumulated amortization of capitalized issuance costs | 26,647 | 23,890 |
Wells Fargo Mortgage Facility | ||
Debt Instrument [Line Items] | ||
Accumulated amortization of capitalized issuance costs | $ 47,053 | $ 40,331 |
Loans Payable - Principal Repay
Loans Payable - Principal Repayments on Indebtedness (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Less unamortized issuance costs | $ (543,106) | $ (566,873) |
Mortgages Payable | ||
Debt Instrument [Line Items] | ||
For the remaining nine months ending December 31, 2024 | 612,808 | |
2025 | 1,091,730 | |
2026 | 1,139,886 | |
2027 | 17,280,528 | |
2028 | 721,207 | |
Thereafter | 30,291,967 | |
Total principal payments and debt maturities | 51,138,126 | |
Less unamortized issuance costs | (543,106) | |
Net principal payments and debt maturities | $ 50,595,020 | $ 50,772,773 |
Loans Payable - Additional Info
Loans Payable - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 15 Months Ended | ||||||
Feb. 01, 2023 | Jan. 31, 2023 | Jan. 01, 2023 | Jun. 13, 2022 | Oct. 28, 2021 | Jun. 30, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Mar. 31, 2024 | |
Debt Instrument [Line Items] | ||||||||||
Consent fee | $ 0 | |||||||||
Loss on extinguishment of debt | $ 51,837 | |||||||||
Unamortized issuance costs, net | 543,106 | $ 566,873 | 543,106 | |||||||
Mortgages Payable | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Mortgages payables | 50,595,020 | $ 50,772,773 | 50,595,020 | |||||||
Unamortized issuance costs, net | $ 543,106 | $ 543,106 | ||||||||
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 | 5.33% | 5.35% | 5.33% | |||||||
Parkway Property | Interest Rate Protection Transaction | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Description of interest rate | capped at 5.25% if USD 1-Month ICE LIBOR exceeds 3% | |||||||||
Fair value of derivative | $ 209,053 | $ 173,715 | $ 209,053 | |||||||
Parkway Property | Interest Rate Protection Transaction | Secured Overnight Financing Rate (SOFR) | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Description of interest rate | 5.33% | 5.35% | ||||||||
Parkway Property | Mortgages Payable | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum allowed change in interest payable each month during any 6 month period | 1% | |||||||||
Maximum allowed change in interest payable each month during any 12 month period | 2% | |||||||||
Effective interest rate | 7.05% | |||||||||
Debt service coverage ratio | not less than 1.30 to 1.00 on an annual basis | |||||||||
Amortization schedule of the mortgage loan | 30 years | |||||||||
Parkway Property | Mortgages Payable | ICE LIBOR | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate | 2.25% | 2.25% | ||||||||
Parkway Property | Mortgages Payable | Secured Overnight Financing Rate (SOFR) | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 2.3644% | |||||||||
Franklin Square Property | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Consent fee | $ 132,500 | $ 132,500 | ||||||||
Refinance with new mortgage payable | $ 13,250,000 | 13,250,000 | $ 13,250,000 | |||||||
Franklin Square Property | Mortgages Payable | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate | 3.808% | 3.808% | ||||||||
Net worth to be maintained by the entity (excluding mortgaged property's assets and liabilities) | $ 13,250,000 | $ 13,250,000 | ||||||||
Amortization schedule of the mortgage loan | 30 years | |||||||||
Minimum liquid assets to be maintained | $ 1,000,000 | $ 1,000,000 | ||||||||
Franklin Square Property | Mortgages Payable | Monthly payments till January 6, 2025 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate | 3.808% | 3.808% | ||||||||
Franklin Square Property | Mortgages Payable | Monthly payments after January 6, 2025 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fixed monthly payment including principal and interest | $ 61,800 | |||||||||
Hanover Square Property | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Loss on extinguishment of debt | $ 51,837 | $ 0 | ||||||||
Hanover Square Property | Mortgages Payable | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate | 6.94% | 4.25% | ||||||||
Term of loan | 5 years | |||||||||
Fixed monthly payment including principal and interest | $ 78,098 | $ 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% | |||||||||
Hanover Square Property | Mortgages payable, net, associated with assets held for sale | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate | 6.94% | 6.94% | ||||||||
Refinance with new mortgage payable | 9,640,725 | |||||||||
Fixed monthly payment including principal and interest | $ 78,098 | |||||||||
Unamortized issuance costs, net | 51,837 | |||||||||
Ashley Plaza Property | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Refinance with new mortgage payable | $ 10,651,510 | 10,708,557 | $ 10,651,510 | |||||||
Ashley Plaza Property | Mortgages Payable | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate | 3.75% | 3.75% | ||||||||
Fixed monthly payment including principal and interest | $ 52,795 | |||||||||
Net worth to be maintained by the entity (excluding mortgaged property's assets and liabilities) | $ 11,400,000 | $ 11,400,000 | ||||||||
Amortization schedule of the mortgage loan | 30 years | |||||||||
Minimum liquid assets to be maintained | $ 1,140,000 | 1,140,000 | ||||||||
Brookfield Center Property. | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Refinance with new mortgage payable | $ 4,547,770 | 4,571,410 | $ 4,547,770 | |||||||
Brookfield Center Property. | Mortgages Payable | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Rate | 3.90% | 3.90% | ||||||||
Fixed monthly payment including principal and interest | $ 22,876 | |||||||||
Net worth to be maintained by the entity (excluding mortgaged property's assets and liabilities) | $ 4,850,000 | $ 4,850,000 | ||||||||
Amortization schedule of the mortgage loan | 30 years | |||||||||
Minimum liquid assets to be maintained | $ 485,000 | 485,000 | ||||||||
Parkway Property | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Refinance with new mortgage payable | $ 4,856,285 | 4,870,403 | $ 4,856,285 | |||||||
Parkway Property | Interest Rate Protection Transaction | ICE LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate exposure cap | 3% | |||||||||
Parkway Property | Interest Rate Protection Transaction | Secured Overnight Financing Rate (SOFR) | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate exposure cap | 3% | 3% | ||||||||
Parkway Property | Mortgages Payable | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fixed monthly payment including principal and interest | $ 28,161 | |||||||||
Parkway Property | Mortgages Payable | ICE LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 2.25% | |||||||||
Wells Fargo Mortgage Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt service coverage ratio | not less than 1.50 to 1.00 | |||||||||
Refinance with new mortgage payable | $ 17,832,561 | $ 17,939,276 | $ 17,832,561 | |||||||
Wells Fargo Mortgage Facility | Mortgages Payable | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maturity period | 5 years | |||||||||
Interest Rate | 4.50% | 4.50% | 4.50% | |||||||
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 |
Loans Payable - Wells Fargo Lin
Loans Payable - Wells Fargo Line of Credit (Details) - USD ($) | Jun. 13, 2022 | Mar. 31, 2024 | Dec. 31, 2023 |
Loans Payable | |||
Line of credit, short term, net | $ 1,000,000 | ||
Wells Fargo Line of Credit | |||
Loans Payable | |||
Line of credit, maximum borrowing capacity | $ 1,500,000 | ||
Line of credit, short term, net | $ 0 | $ 1,000,000 | |
Basis spread on variable rate | 2.25% | ||
Term of loan | 1 year | ||
Wells Fargo Line of Credit | SOFR | |||
Loans Payable | |||
Interest Rate | 5.33% | 5.35% |
Rentals under Operating Lease_2
Rentals under Operating Leases (Details) | Mar. 31, 2024 USD ($) |
Future minimum rents to be received under operating leases | |
For the remaining nine months ending December 31, 2024 | $ 5,424,102 |
2025 | 6,656,905 |
2026 | 4,913,650 |
2027 | 3,981,719 |
2028 | 3,238,444 |
Thereafter | 7,136,356 |
Total minimum rents | $ 31,351,176 |
Equity - Additional Information
Equity - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||||
Feb. 06, 2024 $ / shares | Jan. 27, 2023 $ / shares | Mar. 31, 2024 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) shares | Aug. 31, 2020 $ / 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 | $ 0.01 | ||||
Preferred stock, shares authorized | 250,000,000 | |||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | |||||
Legal costs and filing fees associated with filling of shelf registration statement | $ | $ 84,926 | $ 84,926 | ||||
Common stock, shares, outstanding | 2,236,631 | 2,218,810 | ||||
Dividend paid | $ | $ 510,950 | $ 178,945 | ||||
Dividends paid per common share (in dollars per share) | $ / shares | $ 0.01 | $ 0.08 | $ 0.01 | $ 0.08 | ||
Noncontrolling Interest Operating Partnership | ||||||
Equity [Line Items] | ||||||
Operating Partnership Units outstanding | 2,707,679 | 2,245,501 | ||||
Dividend paid | $ | $ 653 | $ 2,135 | ||||
General Partner | Noncontrolling Interest Operating Partnership | ||||||
Equity [Line Items] | ||||||
Operating Partnership Units outstanding | 2,236,631 | 2,218,810 | ||||
General Partner | Medalist Diversified Real Estate Investment Trust, Inc. ("REIT") | Noncontrolling Interest Operating Partnership | ||||||
Equity [Line Items] | ||||||
Common stock, shares, outstanding | 2,236,631 | 2,218,810 | ||||
Noncontrolling Limited Partner | Noncontrolling Interest Operating Partnership | ||||||
Equity [Line Items] | ||||||
Operating Partnership Units outstanding | 471,048 | 26,691 | ||||
Operating Partnership Unit holders (distributions) | Noncontrolling Interest Operating Partnership | ||||||
Equity [Line Items] | ||||||
Operating Partnership Units eligible for conversion | 14,960 | 26,691 | ||||
Operating Partnership Unit holders (distributions) | Noncontrolling Limited Partner | Noncontrolling Interest Operating Partnership | ||||||
Equity [Line Items] | ||||||
Operating Partnership Units outstanding | 14,960 | 26,691 | ||||
Common unit to common share conversion ratio | 1 | 1 | ||||
Operating Partnership | General Partner | ||||||
Equity [Line Items] | ||||||
Operating Partnership ownership interest | 82.60% | 98.81% | ||||
Operating Partnership | Noncontrolling Limited Partner | ||||||
Equity [Line Items] | ||||||
Common unit to common share conversion ratio | 1 |
Equity - 2018 Equity Incentive
Equity - 2018 Equity Incentive Plan (Details) | 12 Months Ended | |||||
Jan. 18, 2024 USD ($) item director shares | May 03, 2023 | Aug. 23, 2018 shares | Dec. 31, 2023 shares | Mar. 31, 2024 shares | Jan. 01, 2024 shares | |
Equity [Line Items] | ||||||
Conversion ratio | 0.125 | |||||
2018 Equity Incentive Plan | ||||||
Equity [Line Items] | ||||||
Number of shares issued | 0 | |||||
Number of shares available for issuance under the plan | 4,895 | 61,413 | ||||
Percentage of fully diluted shares of common shares | 8% | |||||
Fair value of grants | $ | $ 277,500 | |||||
Percent incremental common shares reserved | 8% | |||||
2018 Equity Incentive Plan | Consultants | ||||||
Equity [Line Items] | ||||||
Number of shares granted | 2,546 | |||||
Number of consultants | item | 1 | |||||
2018 Equity Incentive Plan | Minimum | ||||||
Equity [Line Items] | ||||||
Number of shares authorized | 30,000 | |||||
2018 Equity Incentive Plan | Independent directors | ||||||
Equity [Line Items] | ||||||
Number of shares granted | 15,275 | |||||
Number of directors who received grants | director | 5 | |||||
2018 Equity Incentive Plan | President and Chief Executive Officer | ||||||
Equity [Line Items] | ||||||
Operating partnership units issued | 38,697 |
Equity - Earnings Per Common Sh
Equity - Earnings Per Common Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Basic and diluted shares outstanding | ||
Weighted average Common Shares - basic | 2,233,182 | 2,219,803 |
Effect of conversion of Operating Partnership Units | 14,960 | 26,691 |
Weighted average common shares - diluted | 2,248,142 | 2,246,494 |
Calculation of earnings per share - basic and diluted | ||
Net Income (Loss) | $ 1,357,398 | $ (1,221,295) |
Weighted average Common Shares - basic | 2,233,182 | 2,219,803 |
Weighted average Common Shares - diluted | 2,248,142 | 2,219,803 |
Earnings per share - basic | $ 0.61 | $ (0.55) |
Earnings per share - diluted | $ 0.60 | $ (0.55) |
Equity - Dividends and Distribu
Equity - Dividends and Distributions to Noncontrolling Interests Paid (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Equity [Line Items] | ||
Common shareholders (dividends) | $ 22,341 | $ 176,810 |
Noncontrolling interest (distributions) | 61,589 | |
Total dividends and distributions | 510,950 | 178,945 |
Hanover Square Property | ||
Equity [Line Items] | ||
Noncontrolling interest (distributions) | 479,856 | |
Parkway Property | ||
Equity [Line Items] | ||
Noncontrolling interest (distributions) | 8,100 | |
Operating Partnership Unit holders (distributions) | ||
Equity [Line Items] | ||
Noncontrolling interest (distributions) | $ 653 | $ 2,135 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies | |
Percentage of total annualized base revenues of properties in the Mid-Atlantic | 99% |
Related Party Transactions - Me
Related Party Transactions - Medalist Fund Manager Inc (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Amounts payable to Manager | ||
Retail center property operating expenses | $ 428,259 | $ 512,887 |
Flex center property operating expenses | 144,673 | 176,737 |
Legal, accounting and other professional fees | $ 393,078 | $ 525,628 |
Segment Information - Property
Segment Information - Property Operating Revenues, Expenses and NOI by Product Type (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 2,571,639 | $ 2,460,976 |
Operating expenses | 2,574,544 | 2,801,692 |
Bad debt expense | 14,056 | 27,122 |
Net operating income | 2,764,760 | (340,716) |
Operating segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 2,571,639,000 | 2,460,976,000 |
Operating expenses | 580,640,000 | 697,352,000 |
Bad debt expense | 14,056,000 | 27,122,000 |
Net operating income | 1,976,943,000 | 1,736,502,000 |
Operating segments | Retail center properties | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,849,617,000 | 1,835,373,000 |
Operating expenses | 428,259,000 | 512,887,000 |
Bad debt expense | 125,000 | |
Net operating income | 1,421,358,000 | 1,322,361,000 |
Operating segments | Flex center property | ||
Segment Reporting Information [Line Items] | ||
Revenues | 664,067,000 | 569,297,000 |
Operating expenses | 144,673,000 | 176,737,000 |
Bad debt expense | 14,056,000 | 26,997,000 |
Net operating income | 505,338,000 | 365,563,000 |
Operating segments | STNL properties | ||
Segment Reporting Information [Line Items] | ||
Revenues | 57,955,000 | 56,306,000 |
Operating expenses | 7,708,000 | 7,728,000 |
Net operating income | $ 50,247,000 | $ 48,578,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - $ / shares | 3 Months Ended | |||||||||||||||||
Apr. 25, 2024 | Feb. 16, 2024 | Feb. 06, 2024 | Apr. 28, 2023 | Jan. 27, 2023 | Oct. 20, 2022 | Jul. 21, 2022 | Apr. 21, 2022 | Jan. 20, 2022 | Oct. 27, 2021 | Jul. 26, 2021 | Apr. 30, 2021 | Feb. 01, 2021 | Oct. 26, 2020 | Jul. 24, 2020 | Apr. 27, 2020 | Mar. 31, 2024 | Mar. 31, 2023 | |
Subsequent Event [Line Items] | ||||||||||||||||||
Common stock dividend paid | $ 0.01 | $ 0.08 | $ 0.01 | $ 0.08 | ||||||||||||||
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 | $ 0.50 | $ 0.50 | $ 0.37 | ||||
Noncontrolling Limited Partner | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Redemption of operating partnership units | 11,731 | |||||||||||||||||
Subsequent event | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Dividends paid (in dollars per share) | $ 0.50 | |||||||||||||||||
Subsequent event | Common Stock | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Common stock dividend paid | 0.02 | |||||||||||||||||
Subsequent event | Mandatorily redeemable preferred stock. | ||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||
Dividends paid (in dollars per share) | $ 0.50 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 1,357,398 | $ (1,221,295) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Rule10b51ArrModified Flag | false |
NonRule10b51ArrModified Flag | false |