Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 04, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Rich Uncles Real Estate Investment Trust I | |
Entity Central Index Key | 1,672,754 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 8,394,484 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Real estate investments: | ||
Land | $ 29,896,957 | $ 29,896,957 |
Buildings and improvements | 98,084,241 | 97,857,500 |
Tenant origination and absorption costs | 12,699,134 | 12,699,134 |
Total real estate investments, cost | 140,680,332 | 140,453,591 |
Accumulated depreciation and amortization | (10,735,165) | (9,286,921) |
Total real estate investments, net | 129,945,167 | 131,166,670 |
Cash and cash equivalents | 5,786,811 | 5,565,667 |
Restricted cash | 462,140 | 462,140 |
Tenant receivables, net | 1,439,430 | 1,494,938 |
Above-market leases, net | 808,352 | 817,182 |
Interest rate swap derivatives | 532,668 | 321,450 |
Other assets | 3,984 | 25,207 |
Total assets | 138,978,552 | 139,853,254 |
Liabilities and Shareholders’ Equity | ||
Mortgage notes payable, net | 62,054,451 | 62,277,387 |
Accounts payable, accrued and other liabilities | 1,754,420 | 1,254,632 |
Sales deposit liability (Note 5) | 1,000,000 | 1,000,000 |
Share repurchase payable | 1,171,406 | 612,099 |
Below-market leases, net | 3,750,967 | 3,966,008 |
Due to affiliates | 66,200 | 51,518 |
Interest rate swap derivatives | 0 | 18,998 |
Total liabilities | 69,797,444 | 69,180,642 |
Commitments and contingencies | ||
Redeemable common stock | 586,895 | 586,242 |
Equity | ||
Common stock, par value $0.01 per share, 10,000,000 shares authorized, 8,409,920 and 8,358,254 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively | 84,007 | 83,583 |
Additional paid-in-capital | 82,306,560 | 82,350,273 |
Cumulative distributions and net losses | (13,796,354) | (12,347,486) |
Total shareholders’ equity | 68,594,213 | 70,086,370 |
Total liabilities and shareholder’s equity | $ 138,978,552 | $ 139,853,254 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 8,409,920 | 8,358,254 |
Common Stock, Shares, Outstanding | 8,409,920 | 8,358,254 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues: | ||
Rental income | $ 2,742,560 | $ 2,392,795 |
Tenant recoveries | 488,658 | 333,472 |
Total revenues | 3,231,218 | 2,726,267 |
Expenses: | ||
Fees to affiliates (Note 9) | 285,535 | 162,201 |
General and administrative | 263,364 | 149,665 |
Depreciation and amortization | 1,448,244 | 1,218,074 |
Interest expense | 484,873 | 461,200 |
Property expenses | 631,138 | 340,959 |
Total expenses | 3,113,154 | 2,332,099 |
Other income - interest income | 0 | 280 |
Other income: | ||
Net income | $ 118,064 | $ 394,448 |
Net income per share, basic and diluted | $ 0.01 | $ 0.05 |
Weighted-average number of common shares outstanding, basic and diluted | 8,416,374 | 8,318,101 |
Dividends declared per common share | $ 0.1875 | $ 0.1875 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Shareholders' Equity - 3 months ended Mar. 31, 2018 - USD ($) | Total | Common Stock [Member] | Additional Paid -in- Capital [Member] | Cumulative Distributions and Net Losses [Member] |
Balance at Dec. 31, 2017 | $ 70,086,370 | $ 83,583 | $ 82,350,273 | $ (12,347,486) |
Balance (in shares) at Dec. 31, 2017 | 8,358,254 | |||
Issuance of common stock | 1,088,259 | $ 1,021 | 1,087,238 | 0 |
Issuance of common stock (in shares) | 108,826 | |||
Dividends declared | (1,566,932) | $ 0 | 0 | (1,566,932) |
Common stock awarded for services | 40,518 | $ 15 | 40,403 | 0 |
Common stock awarded for services (in shares) | 4,051 | |||
Repurchase of common stock | (612,106) | $ (612) | (611,494) | 0 |
Repurchase of common stock (in shares) | (61,211) | |||
Transfer to redeemable common stock | (559,960) | $ 0 | (559,960) | 0 |
Net income | 118,064 | 0 | 0 | 118,064 |
Balance at Mar. 31, 2018 | $ 68,594,213 | $ 84,007 | $ 82,306,560 | $ (13,796,354) |
Balance (in shares) at Mar. 31, 2018 | 8,409,920 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash Flows from Operating Activities: | ||
Net income | $ 118,064 | $ 394,448 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,448,244 | 1,218,074 |
Provision for doubtful accounts | 40,786 | 0 |
Common stock awarded for services | 40,518 | 30,000 |
Straight-line rents | (100,499) | (155,188) |
Amortization of deferred financing costs | 86,448 | 68,258 |
Amortization of above-market lease | 8,830 | 6,016 |
Amortization of below-market leases | (215,041) | (219,003) |
Unrealized gain on interest rate swap valuation | (230,216) | (85,457) |
Expensed organization and offering costs | 32,554 | 32,779 |
Changes in operating assets and liabilities: | ||
Tenant receivables | 115,221 | (88,227) |
Other assets | 21,222 | (16,821) |
Accounts payable, accrued and other liabilities | 284,328 | 551,947 |
Due to affiliates | (84,015) | 34,909 |
Net cash provided by operating activities | 1,566,444 | 1,771,735 |
Cash Flows from Investing Activities: | ||
Acquisition of real estate investment | 0 | (25,750,000) |
Payments of acquisition fees and costs | 0 | (602,523) |
Payment of seller holdback | 0 | (250,000) |
Additions to real estate investment | (11,280) | (53,978) |
Net cash used in investing activities | (11,280) | (26,656,501) |
Cash Flows from Financing Activities: | ||
Proceeds from mortgage notes payable | 0 | 24,865,612 |
Repayments of mortgage notes payable | (309,384) | (208,936) |
Reimbursement (payments) of deferred financing costs | 16,634 | (491,049) |
Reimbursement (payments) of organization and offering costs | 49,509 | (32,800) |
Repurchase of common stock | (612,106) | (592,518) |
Dividends paid to common shareholders | (478,673) | (455,958) |
Net cash (used in) provided by financing activities | (1,334,020) | 23,084,351 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 221,144 | (1,800,415) |
Cash, cash equivalents and restricted cash, beginning of period | 6,027,807 | 13,465,152 |
Cash, cash equivalents and restricted cash, end of period | 6,248,951 | 11,664,737 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 634,745 | 383,503 |
Supplemental Schedule of Noncash Investing and Financing Activities: | ||
Increase (decrease) in transfers to redeemable common stock | (559,960) | 103,586 |
Increase in share redemptions payable | (559,307) | 43,019 |
Reinvested dividends from common shareholders | 1,088,259 | 1,092,631 |
Unpaid real estate investment additions | 215,461 | 0 |
Purchase deposits applied to acquisition of real estates | $ 0 | $ 1,250,000 |
BUSINESS AND ORGANIZATION
BUSINESS AND ORGANIZATION | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Business Description and Basis of Presentation [Text Block] | Rich Uncles Real Estate Investment Trust I (the “Company”) was formed on March 7, 2012. The Company is an unincorporated association under the laws of the State of California and is treated as a real estate investment trust (“REIT”). The Company elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, beginning with the year ended December 31, 2014. The Company was formed primarily to invest in single-tenant income-producing corporate properties located in California and that are leased to creditworthy tenants under long-term net leases, however, the Company may invest up to 20% of the net proceeds of its offering in properties located outside of California. The Company’s goal is to generate current income for investors and long-term capital appreciation in the value of its properties. The Company holds its investments directly and/or through special purpose wholly-owned limited liability companies or other subsidiaries. The Company holds a 70.14 The Company is externally managed by its advisor and sponsor, BrixInvest LLC, formerly Rich Uncles LLC (the “Advisor” or the “Sponsor”) whose members include Harold Hofer and Ray Wirta, the Company’s Chief Executive Officer and President and Chairman of the Board of Trust Managers, respectively. BrixInvest LLC is a Delaware limited liability company registered to do business in California. The Company has entered into an agreement (the “Advisory Agreement”) with the Advisor. The term of the Advisory Agreement expired on March 8, 2018 and was renewed on a month-to-month basis while the Company’s independent trust managers were reviewing the annual performance of the Advisor prior to any annual renewal, which review was completed on May 11, 2018, and the Advisory Agreement was renewed for an additional year . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. Such unaudited condensed consolidated financial statements and accompanying notes are the representations of the Company’s management, which is responsible for their integrity and objectivity. These unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2017 audited consolidated financial statements included in the Company’s Form 10-K filed with the SEC on April 2, 2018. The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which are normal and recurring, necessary to fairly state its financial position, results of operations and cash flows. All significant intercompany balances and transactions are eliminated in consolidation. The December 31, 2017 condensed consolidated balance sheet included herein was derived from the audited financial statements but does not include all disclosures or notes required by GAAP for complete financial statements. Use of Estimates The preparation of the condensed consolidated financial statements and accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. Restricted Cash Restricted cash is comprised of funds which are restricted for use as required by certain lenders in conjunction with an acquisition or debt financing. Other Comprehensive Income (Loss) For all periods presented, other comprehensive income is the same as net income. Per Share Data Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share of common stock equals basic earnings per share of common stock as there were no potentially dilutive securities outstanding during the three months ended March 31, 2018 and 2017. Recent Accounting Pronouncements New Accounting Standards Issued and Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09, as amended, requires an entity to use a five-step model to determine when to recognize revenue from customer contracts in an effort to increase consistency and comparability throughout global capital markets and across industries. ASU 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry specific guidance throughout the Industry Topics of the Codification. This ASU requires an entity to recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and to provide certain additional disclosures. The Company has evaluated each of its revenue streams and their related accounting policies under ASU 2014-09. Rental income and tenant recoveries earned from leasing its real estate properties are excluded from ASU 2014-09 and are assessed with the adoption of the ASU for leases as discussed below. The Company adopted ASU 2014-09 beginning January 1, 2018 and utilized the modified retrospective basis. The adoption of ASU 2014-09 did not have a material impact on the Company’s consolidated financial statements. However, future real estate sales contracts will qualify as sales to noncustomers. The Company will assess and implement any future recognition of gain or loss on sales of properties according to the provisions of ASU 2014-09. New Accounting Standards Recently Issued and Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The amendments in ASU 2016-02 change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. Under ASU 2016-02, the accounting applied by a lessor is largely unchanged from that applied under Topic 840 leases. The large majority of operating leases shall remain classified as operating leases and lessors should continue to recognize rental income for those leases on a straight-line basis over the lease term. ASU 2016-02 may impact the timing, recognition, presentation and disclosures related to the Company’s tenant recoveries earned from leasing its real estate properties, although the Company does not expect a significant impact. ASU 2016-02 is effective for the Company on January 1, 2019. The Company expects to adopt the practical expedients available for implementation under ASU 2016-02. By adopting the practical expedients, the Company will not be required to reassess (i) whether an expired or existing contract meets the definition of a lease and (ii) the lease classification at the adoption date for expired or existing leases. ASU 2016-02 will also require new disclosures within the notes to its consolidated financial statements. The Company is continuing to evaluate the potential impact of adopting ASU 2016-02 and the Company intends to consider industry practice and potential updates to ASU 2016-02. |
CONDENSED CONSOLIDATED BALANCE9
CONDENSED CONSOLIDATED BALANCE SHEETS DETAILS | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Balance Sheet Disclosures [Text Block] | NOTE 3. CONDENSED CONSOLIDATED BALANCE SHEETS DETAILS March 31, December 31, A. Tenant receivables, net: Straight-line rent $ 1,182,579 $ 1,082,080 Tenant rent 122,858 301,588 Unbilled tenant recoveries 158,826 93,420 Other 74,281 76,178 1,538,544 1,553,266 Less allowance for doubtful accounts (99,114) (58,328) Net $ 1,439,430 $ 1,494,938 B. Accounts payable, accrued and other liabilities: Accounts payable $ 216,556 $ 45,029 Accrued expenses 498,811 205,774 Accrued interest payable 210,777 215,700 Unearned rent 558,170 518,023 Tenant security deposits 270,106 270,273 Total $ 1,754,420 $ 1,254,632 |
REAL ESTATE INVESTMENTS
REAL ESTATE INVESTMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Real Estate [Abstract] | |
Real Estate Disclosure [Text Block] | NOTE 4. REAL ESTATE INVESTMENTS Property Location Acquisition Property Land, Tenant Accumulated Total Teal Chase Bank & Great Clips Antioch, CA 8/22/2014 Retail $ 3,160,035 $ 668,200 $ (1,106,718) $ 2,721,518 Chevron Gas Station San Jose, CA 5/29/2015 Retail 2,775,000 (111,443) 2,663,557 Levins Sacramento, CA 8/19/2015 Industrial 3,750,000 (558,808) 3,191,192 Chevron Gas Station (See Note 5) Roseville, CA 9/30/2015 Retail 2,800,000 (242,895) 2,557,105 Island Pacific Supermarket Elk Grove, CA 10/1/2015 Retail 3,151,460 568,540 (421,266) 3,298,733 Dollar General Bakersfield, CA 11/11/2015 Retail 4,632,567 689,020 (456,094) 4,865,493 Rite Aid Lake Elsinore, CA 12/7/2015 Retail 6,663,446 968,286 (546,731) 7,085,000 PMI Preclinical San Carlos, CA 12/9/2015 Industrial 8,920,000 (471,173) 8,448,827 EcoThrift Sacramento, CA 3/17/2016 Retail 4,486,993 541,729 (494,504) 4,534,218 GSA (MSHA) Vacaville, CA 4/5/2016 Office 2,998,232 456,645 (285,273) 3,169,604 PreK San Antonio San Antonio, TX 4/8/2016 Retail 11,851,540 1,593,451 (1,788,183) 11,656,808 Dollar Tree Morrow, GA 4/22/2016 Retail 1,295,879 206,844 (181,513) 1,321,210 Dinan Cars Morgan Hill, CA 6/21/2016 Industrial 4,651,845 654,155 (681,243) 4,624,757 Solar Turbines San Diego, CA 7/21/2016 Office 5,556,726 389,718 (478,988) 5,467,456 Amec Foster San Diego, CA 7/21/2016 Industrial 7,003,261 485,533 (323,469) 7,165,325 ITW Rippey El Dorado, CA 8/18/2016 Industrial 6,178,204 407,316 (375,774) 6,209,746 Dollar General Big Spring Big Spring, TX 11/4/2016 Retail 1,161,647 112,958 (41,764) 1,232,841 Gap Rocklin, CA 12/1/2016 Office 7,220,909 677,191 (412,589) 7,485,512 L-3 Communications San Diego, CA 12/23/2016 Industrial 10,799,500 961,107 (458,129) 11,302,478 Sutter Health Rancho Cordova, CA 3/15/2017 Office 24,256,632 2,870,258 (1,207,138) 25,919,752 Walgreens Santa Maria, CA 6/29/2017 Retail 4,667,322 448,183 (91,470) 5,024,035 Total $ 127,981,198 $ 12,699,134 $ (10,735,165) $ 129,945,167 Current Acquisitions There were no acquisitions during the three months ended March 31, 2018. Operating Leases The Company’s real estate properties are primarily leased to tenants under triple-net leases for which terms and expirations vary. The Company monitors the credit of all tenants to stay abreast of any material changes in credit quality. The Company monitors tenant credit by (1) reviewing the credit ratings of tenants (or their parent companies or lease guarantors) that are rated by national recognized rating agencies; (2) reviewing financial statements and related metrics and information that are publicly available or that are required to be provided pursuant to the lease; (3) monitoring new reports and press releases regarding the tenants (or their parent companies or lease guarantors), and their underlying business and industry; and (4) monitoring the timeliness of rent collections. April 2018 through December 2018 $ 7,393,136 2019 10,027,621 2020 10,228,801 2021 9,260,672 2022 7,714,989 2023 5,914,111 Thereafter 26,097,425 Total $ 76,636,755 Property and Location Annualized Percentage of Sutter Health, Rancho Cordova, CA $ 1,920,911 $ 19.60 % (1) Effective Annualized Base Rent is calculated based on the monthly base rent at March 31, 2018 for twelve months. Intangibles Tenant Above-Market Below-Market Cost $ 12,699,134 $ 872,408 $ (5,349,909) Accumulated amortization (3,248,171) (64,056) 1,598,942 Net amount $ 9,450,963 $ 808,352 $ (3,750,967) 9.60 Tenant Above-Market Below-Market April 2018 through December 2018 $ 1,175,544 $ 26,490 $ (645,123) 2019 1,567,391 35,320 (860,165) 2020 1,567,392 35,320 (860,165) 2021 1,320,274 35,320 (667,541) 2022 1,239,699 35,320 (667,541) 2023 1,128,431 35,320 (50,432) Thereafter 1,452,232 605,262 Total $ 9,450,963 $ 808,352 $ (3,750,967) Weighted average remaining amortization period 8.3 years 35.5 years 5.3 years |
SALE OF INTEREST IN REAL ESTATE
SALE OF INTEREST IN REAL ESTATE INVESTMENT PROPERTY | 3 Months Ended |
Mar. 31, 2018 | |
Real Estate [Abstract] | |
Disposal Of Interest In Real Estate Property [Text Block] | NOTE 5. SALE OF INTEREST IN REAL ESTATE INVESTMENT PROPERTY In March 2016, the Company entered into a tenancy-in-common agreement and sold an undivided 29.86 1,000,000 1,000,000 13,751 29.9 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | NOTE 6. DEBT Mortgage Notes Payable As of March 31, 2018, the Company’s mortgage notes payable consisted of the following: Collateral Principal Amount Deferred Financing Costs Net Balance Contractual Interest Rate Effective Interest Rate (1) Loan Maturity Chase Bank & Great Clips $ 1,878,982 $ (19,352 ) $ 1,859,630 4.37% fixed 4.37 % 2/5/2019 Levins 2,158,735 (33,540 ) 2,125,195 One-month LIBOR + 1.93% 3.74 % 1/5/2021 Island Pacific Supermarket 1,963,009 (35,231 ) 1,927,778 One-month LIBOR + 1.93% 3.74 % 1/5/2021 Dollar General 2,416,960 (53,713 ) 2,363,247 One-month LIBOR + 1.48% 3.38 % 3/5/2021 Rite Aid 3,806,848 (100,263 ) 3,706,585 One-month LIBOR + 1.50% 3.25 % 5/5/2021 PMI Preclinical 4,282,733 (123,294 ) 4,159,439 One-month LIBOR + 1.48% 3.38 % 3/5/2021 EcoThrift 2,749,716 (80,867 ) 2,668,849 One-month LIBOR + 1.21% 2.96 % 7/5/2021 GSA (MSHA) 1,870,731 (64,894 ) 1,805,837 One-month LIBOR + 1.25% 3.00 % 8/5/2021 PreK San Antonio 5,309,696 (152,084 ) 5,157,612 4.25% fixed 4.25 % 12/1/2021 Dinan Cars 2,803,705 (75,538 ) 2,728,167 One-month LIBOR + 2.27% 4.02 % 1/5/2022 ITW Rippey, Solar Turbines, Amec Foster 9,802,538 (252,900 ) 9,549,638 3.35% fixed 3.35 % 11/1/2026 L-3 Communications 5,447,851 (125,359 ) 5,322,492 4.50% fixed 4.50 % 4/1/2022 Gap 3,765,419 (91,281 ) 3,674,138 4.15% fixed 4.15 % 8/1/2023 Dollar General Big Spring 630,208 (27,758 ) 602,450 4.69% fixed 4.69 % 3/13/2022 Sutter Health 14,603,162 (199,768 ) 14,403,394 4.50% fixed 4.50 % 3/9/2024 Total $ 63,490,293 $ (1,435,842 ) $ 62,054,451 (1) Contractual interest rate represents the interest rate in effect under the mortgage notes payable as of March 31, 2018. Effective interest rate is calculated as the actual interest rate in effect as of March 31, 2018 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable) (see Note 7 for information regarding the Company’s derivative instruments). The mortgage notes payable provide for monthly payments of principal and interest. The mortgage loans payable have balloon payments that are due at loan maturity. Pursuant to the terms of the mortgage notes payable agreements, the Company is subject to certain financial loan covenants. The Company was in compliance with all terms and conditions of the mortgage loan agreements. The following table is a summary of future principal payments on the Company’s mortgage notes payable as of March 31, 2018: April 2018 through December 2018 $ 923,628 2019 3,092,554 2020 1,286,997 2021 23,879,588 2022 25,556,797 2023 3,964,242 Thereafter 4,786,487 Total $ 63,490,293 Interest Expense Three Months Ended March 31, 2018 2017 Mortgage notes payable Interest expense (1) $ 614,890 $ 464,648 Amortization of deferred financing costs 86,448 68,258 Unrealized gain on interest rate swaps (see Note 7) (230,216 ) (85,457 ) Sales deposit liability (see Note 5) 13,751 13,751 Total interest expense $ 484,873 $ 461,200 (1) Includes $(5,094) and $(467) for the three months ended March 31, 2018 and 2017, respectively, of monthly payments to settle the Company’s interest rate swaps and $1,181 and $3,913 of accrued interest payable at March 31, 2018 and December 31, 2017, respectively, representing the unsettled portion of the interest rate swap valuation for the period from the most recent settlement date through March 31, 2018 and December 31, 2017, respectively. |
INTEREST RATE SWAP DERIVATIVES
INTEREST RATE SWAP DERIVATIVES | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | NOTE 7. INTEREST RATE SWAP DERIVATIVES The primary goal of the Company’s risk management practices related to interest rate risk is to prevent changes in interest rates from adversely impacting the Company’s ability to achieve its investment return objectives. The Company does not enter into derivatives for speculative purposes. The Company enters into interest rate swaps as a fixed rate payer to mitigate its exposure to rising interest rates on its variable rate mortgage notes payable. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining life of the interest rate swap decreases, the value of both positions will generally move towards zero. During 2017, the Company (or wholly owned LLCs) entered into interest rate swap agreements with amortizing notational amounts relating to eight of its mortgage notes payable. The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of March 31, 2018. March 31, 2018 Derivative Number of Notional Amount Reference Rate Weighted Average Weighted Average Interest Rate 8 $ 22,052,437 One-month LIBOR/Fixed at 2.96%-4.02% 3.42 % 3.10 years (1) The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The maximum notional amount is shown above. The minimum notional amount (outstanding principal balance at the maturity date) is $ 20,546,330 March 31, 2018 December 31, 2017 Derivative Instrument Balance Sheet Location Number of Fair Value Number of Fair Value Interest Rate Swaps Asset - Interest rate swap derivatives, at fair value 8 $ 532,668 7 $ 321,450 Liability Interest rate swap derivatives, at fair value $ 1 $ (18,998) The change in fair value of a derivative instrument that is not designated as a cash flow hedge is recorded as interest expense in the condensed consolidated statements of operations. None of the Company’s derivatives at March 31, 2018 nor December 31, 2017 were designated as hedging instruments, therefore the net unrealized gain recognized on interest rate swaps of $ 230,216 85,457 |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | NOTE 8. FAIR VALUE DISCLOSURES The fair value for certain financial instruments is derived using a combination of market quotes, pricing models, and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of financial instrument for which it is practicable to estimate the fair value: Cash and cash equivalents, restricted cash, tenant receivables, due from affiliates, purchase and other deposits, other assets, accounts payable, accrued and other liabilities, sales deposit liability, share repurchase payable, and due to affiliates: Derivative Instruments Mortgage Notes Payable: March 31, 2018 December 31,2017 Face value Carrying value Fair value Face Value Carrying Value Fair Value $ 63,490,293 $ 62,054,451 $ 62,592,027 $ 63,799,677 $ 62,277,387 $ 62,258,522 Disclosures of the fair values of financial instruments are based on pertinent information available to the Company as of March 31, 2018 and December 31, 2017 and require a significant amount of judgment. Low levels of transaction volume for certain financial instruments have made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. The actual value could be materially different from the Company’s estimate of value. Recurring Basis Total Quoted Prices in Significant Other Significant March 31, 2018: Asset Interest rate swap derivatives $ 532,668 $ $ 532,668 $ December 31, 2017: Asset Interest rate swap derivatives $ 321,450 $ $ 321,450 $ Liability Interest rate swap derivatives $ (18,998) $ $ (18,998) $ |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 9. RELATED PARTY TRANSACTIONS The costs incurred by the Company pursuant to the Advisory Agreement for the three months ended March 31, 2018 and 2017, as well as the related amounts payable or receivable as of March 31, 2018 and December 31, 2017 are included in the table below. Three Three March 31, March 31, 2018 March 31, December 31, 2017 Incurred Receivable Payable Incurred Receivable Payable Expensed: Asset management fees $ 201,969 $ $ $ 162,201 $ $ 3,513 Other operating expense reimbursement 47,948 Reimbursable operating expense 83,566 49,566 Fees to affiliates 285,535 162,201 Property management fees * 24,389 17,866 Reimbursable organizational and offering expenses 32,554 32,779 57 Capitalized: Acquisition fees 540,000 Financing coordination fees 100,156 Other: Due to advisor for costs advanced 16,634 16,634 15,000 Total $ $ 66,200 $ $ 51,518 * Property management fees are included in “property expenses” in the accompanying condensed consolidated statement of operations for the three months ended March 31, 2018 and 2017. Organizational and Offering Expenses During the Company’s offering of its common stock which was terminated in July 2016, the Company was obligated to reimburse the Advisor or its affiliates for organizational and offering expenses paid by the Advisor on behalf of the Company. The Company reimburses the Advisor for organizational and offering expenses up to 3.0% of gross offering proceeds. As of March 31, 2018, the Advisor had incurred organizational and offering expenses of $ 2,719,961 Through March 31, 2018 and December 31, 2017, the Company has reimbursed the Advisor $ 2,719,961 2,687,407 2,719,961 2,687,464 0 57 Acquisition Fees The Company pays the Advisor an acquisition fee in an amount equal 3.0 6.0 Asset Management Fee The Company pays the Advisor as compensation for the advisory services rendered, a monthly fee in an amount equal to 0.05 Financing Coordination Fee Other than with respect to any mortgage or other financing related to a property that is concurrent with its acquisition, if the Advisor or an affiliate provides a substantial amount of the services (as determined by a majority of the Company’s independent trust managers) in connection with the post-acquisition financing or refinancing of any debt that the Company obtains relative to a property, then the Company will pay to the Advisor or such affiliate a financing coordination fee equal to 1.0 Property Management Fees If the Advisor or any of its affiliates provides a substantial amount of the property management services (as determined by a majority of the Company’s independent trust managers) for the Company’s properties, then the Company pays the Advisor or such affiliate a property management fee equal to 1.5 Disposition Fees For substantial assistance in connection with the sale of properties, the Company pays the Advisor or one of its affiliates 3.0 6 Leasing Commission Fees If the Advisor or any of its affiliates provides a substantial amount of the services (as determined by a majority of the Company’s independent trust managers) in connection with the Company’s leasing of its properties to unaffiliated third parties, then the Company pays the Advisor or such affiliate leasing commissions equal to 6.0 3.0 Other Operating Expense Reimbursement Total operating expenses of the Company are limited to the greater of 2 25 83,566 0 49,566 47,948 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 10. COMMITMENTS AND CONTINGENCIES Economic Dependency The Company depends on the Advisor for certain services that are essential to the Company, including the sale of the identification, evaluation, negotiation, origination, acquisition and disposition of real estate property investments; management of the daily operations of the Company’s investment portfolio; and other general and administrative responsibilities. In the event the Advisor is unable to provide the respective services, the Company will be required to obtain such services from other sources. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the property could result in future environmental liabilities. Tenant Improvements Pursuant to lease agreement, the Company has an obligation to pay for $ 553,088 462,140 Legal Matters From time to time, the Company may become party to legal proceedings that arise in the ordinary course of its business. The Company is not a party to any legal proceeding, nor is the Company aware of any pending or threatened litigation that could have a material adverse effect on the Company’s business, operating results, cash flows, or financial condition should such litigation be resolved unfavorably. The SEC is conducting an investigation related to the advertising and sale of securities by the Company and its affiliated REITs in connection with their respective stock offerings. The investigation is a non-public fact-finding inquiry. It is neither an allegation of wrongdoing nor a finding that violations of law have occurred. In connection with the investigation, the Company and certain affiliates have received and responded to subpoenas from the SEC requesting documents and other information related to these offerings. The SEC’s investigation is ongoing and the Company has cooperated and intends to continue to cooperate with the SEC in this matter. The Company is unable to predict the likely outcome of the investigation or determine its potential impact, if any, on the Company. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 11. SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the condensed consolidated financial statements are issued. Distributions On April 24, 2018 0.002083 1,574,919 April 25, 2018 1,040,365 Repurchase of Common Stock For the period from April 1, 2018 through May 4, 2018, the Company repurchased 106,043 1,130,415 Pending Dispositions On May 4, 2018, the Company entered into a purchase agreement with a potential buyer for the sale of the Company’s investment in the Chevron Gas Station located at 623 S Winchester Blvd. in San Jose, CA. Under this agreement, the Company would sell the Chevron Gas Station property for $ 3.8 875,000 114,000 |
SUMMARY OF SIGNIFICANT ACCOUN18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. Such unaudited condensed consolidated financial statements and accompanying notes are the representations of the Company’s management, which is responsible for their integrity and objectivity. These unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2017 audited consolidated financial statements included in the Company’s Form 10-K filed with the SEC on April 2, 2018. The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which are normal and recurring, necessary to fairly state its financial position, results of operations and cash flows. All significant intercompany balances and transactions are eliminated in consolidation. The December 31, 2017 condensed consolidated balance sheet included herein was derived from the audited financial statements but does not include all disclosures or notes required by GAAP for complete financial statements. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of the condensed consolidated financial statements and accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. |
Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash Restricted cash is comprised of funds which are restricted for use as required by certain lenders in conjunction with an acquisition or debt financing. |
Comprehensive Income, Policy [Policy Text Block] | Other Comprehensive Income (Loss) For all periods presented, other comprehensive income is the same as net income. |
Earnings Per Share, Policy [Policy Text Block] | Per Share Data Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share of common stock equals basic earnings per share of common stock as there were no potentially dilutive securities outstanding during the three months ended March 31, 2018 and 2017. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements New Accounting Standards Issued and Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09, as amended, requires an entity to use a five-step model to determine when to recognize revenue from customer contracts in an effort to increase consistency and comparability throughout global capital markets and across industries. ASU 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry specific guidance throughout the Industry Topics of the Codification. This ASU requires an entity to recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and to provide certain additional disclosures. The Company has evaluated each of its revenue streams and their related accounting policies under ASU 2014-09. Rental income and tenant recoveries earned from leasing its real estate properties are excluded from ASU 2014-09 and are assessed with the adoption of the ASU for leases as discussed below. The Company adopted ASU 2014-09 beginning January 1, 2018 and utilized the modified retrospective basis. The adoption of ASU 2014-09 did not have a material impact on the Company’s consolidated financial statements. However, future real estate sales contracts will qualify as sales to noncustomers. The Company will assess and implement any future recognition of gain or loss on sales of properties according to the provisions of ASU 2014-09. New Accounting Standards Recently Issued and Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The amendments in ASU 2016-02 change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. Under ASU 2016-02, the accounting applied by a lessor is largely unchanged from that applied under Topic 840 leases. The large majority of operating leases shall remain classified as operating leases and lessors should continue to recognize rental income for those leases on a straight-line basis over the lease term. ASU 2016-02 may impact the timing, recognition, presentation and disclosures related to the Company’s tenant recoveries earned from leasing its real estate properties, although the Company does not expect a significant impact. ASU 2016-02 is effective for the Company on January 1, 2019. The Company expects to adopt the practical expedients available for implementation under ASU 2016-02. By adopting the practical expedients, the Company will not be required to reassess (i) whether an expired or existing contract meets the definition of a lease and (ii) the lease classification at the adoption date for expired or existing leases. ASU 2016-02 will also require new disclosures within the notes to its consolidated financial statements. The Company is continuing to evaluate the potential impact of adopting ASU 2016-02 and the Company intends to consider industry practice and potential updates to ASU 2016-02. |
CONDENSED CONSOLIDATED BALANC19
CONDENSED CONSOLIDATED BALANCE SHEETS DETAILS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Balance Sheet [Table Text Block] | March 31, December 31, A. Tenant receivables, net: Straight-line rent $ 1,182,579 $ 1,082,080 Tenant rent 122,858 301,588 Unbilled tenant recoveries 158,826 93,420 Other 74,281 76,178 1,538,544 1,553,266 Less allowance for doubtful accounts (99,114) (58,328) Net $ 1,439,430 $ 1,494,938 B. Accounts payable, accrued and other liabilities: Accounts payable $ 216,556 $ 45,029 Accrued expenses 498,811 205,774 Accrued interest payable 210,777 215,700 Unearned rent 558,170 518,023 Tenant security deposits 270,106 270,273 Total $ 1,754,420 $ 1,254,632 |
REAL ESTATE INVESTMENTS (Tables
REAL ESTATE INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties [Table Text Block] | The following table provides summary information regarding the Company’s real estate investments as of March 31, 2018: Property Location Acquisition Property Land, Tenant Accumulated Total Teal Chase Bank & Great Clips Antioch, CA 8/22/2014 Retail $ 3,160,035 $ 668,200 $ (1,106,718) $ 2,721,518 Chevron Gas Station San Jose, CA 5/29/2015 Retail 2,775,000 (111,443) 2,663,557 Levins Sacramento, CA 8/19/2015 Industrial 3,750,000 (558,808) 3,191,192 Chevron Gas Station (See Note 5) Roseville, CA 9/30/2015 Retail 2,800,000 (242,895) 2,557,105 Island Pacific Supermarket Elk Grove, CA 10/1/2015 Retail 3,151,460 568,540 (421,266) 3,298,733 Dollar General Bakersfield, CA 11/11/2015 Retail 4,632,567 689,020 (456,094) 4,865,493 Rite Aid Lake Elsinore, CA 12/7/2015 Retail 6,663,446 968,286 (546,731) 7,085,000 PMI Preclinical San Carlos, CA 12/9/2015 Industrial 8,920,000 (471,173) 8,448,827 EcoThrift Sacramento, CA 3/17/2016 Retail 4,486,993 541,729 (494,504) 4,534,218 GSA (MSHA) Vacaville, CA 4/5/2016 Office 2,998,232 456,645 (285,273) 3,169,604 PreK San Antonio San Antonio, TX 4/8/2016 Retail 11,851,540 1,593,451 (1,788,183) 11,656,808 Dollar Tree Morrow, GA 4/22/2016 Retail 1,295,879 206,844 (181,513) 1,321,210 Dinan Cars Morgan Hill, CA 6/21/2016 Industrial 4,651,845 654,155 (681,243) 4,624,757 Solar Turbines San Diego, CA 7/21/2016 Office 5,556,726 389,718 (478,988) 5,467,456 Amec Foster San Diego, CA 7/21/2016 Industrial 7,003,261 485,533 (323,469) 7,165,325 ITW Rippey El Dorado, CA 8/18/2016 Industrial 6,178,204 407,316 (375,774) 6,209,746 Dollar General Big Spring Big Spring, TX 11/4/2016 Retail 1,161,647 112,958 (41,764) 1,232,841 Gap Rocklin, CA 12/1/2016 Office 7,220,909 677,191 (412,589) 7,485,512 L-3 Communications San Diego, CA 12/23/2016 Industrial 10,799,500 961,107 (458,129) 11,302,478 Sutter Health Rancho Cordova, CA 3/15/2017 Office 24,256,632 2,870,258 (1,207,138) 25,919,752 Walgreens Santa Maria, CA 6/29/2017 Retail 4,667,322 448,183 (91,470) 5,024,035 Total $ 127,981,198 $ 12,699,134 $ (10,735,165) $ 129,945,167 |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | As of March 31, 2018, the future minimum contractual rental income from the Company’s non-cancelable operating leases is as follows: April 2018 through December 2018 $ 7,393,136 2019 10,027,621 2020 10,228,801 2021 9,260,672 2022 7,714,989 2023 5,914,111 Thereafter 26,097,425 Total $ 76,636,755 |
Schedule of Asset Portfolio Concentration [Table Text Block] | For the three months ended March 31, 2018, the following tenants accounted for more than 10% of the Company’s total revenue: Property and Location Annualized Percentage of Sutter Health, Rancho Cordova, CA $ 1,920,911 $ 19.60 % (1) Effective Annualized Base Rent is calculated based on the monthly base rent at March 31, 2018 for twelve months. |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | As of March 31, 2018, the Company’s intangibles were as follows: Tenant Above-Market Below-Market Cost $ 12,699,134 $ 872,408 $ (5,349,909) Accumulated amortization (3,248,171) (64,056) 1,598,942 Net amount $ 9,450,963 $ 808,352 $ (3,750,967) |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The intangible assets and liabilities acquired in connection with these acquisitions have a weighted average amortization period of approximately 9.60 Tenant Above-Market Below-Market April 2018 through December 2018 $ 1,175,544 $ 26,490 $ (645,123) 2019 1,567,391 35,320 (860,165) 2020 1,567,392 35,320 (860,165) 2021 1,320,274 35,320 (667,541) 2022 1,239,699 35,320 (667,541) 2023 1,128,431 35,320 (50,432) Thereafter 1,452,232 605,262 Total $ 9,450,963 $ 808,352 $ (3,750,967) Weighted average remaining amortization period 8.3 years 35.5 years 5.3 years |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | As of March 31, 2018, the Company’s mortgage notes payable consisted of the following: Collateral Principal Deferred Net Balance Contractual Effective Loan Chase Bank & Great Clips $ 1,878,982 $ (19,352) $ 1,859,630 4.37% fixed 4.37 % 2/5/2019 Levins 2,158,735 (33,540) 2,125,195 One-month LIBOR + 1.93% 3.74 % 1/5/2021 Island Pacific Supermarket 1,963,009 (35,231) 1,927,778 One-month LIBOR + 1.93% 3.74 % 1/5/2021 Dollar General 2,416,960 (53,713) 2,363,247 One-month LIBOR + 1.48% 3.38 % 3/5/2021 Rite Aid 3,806,848 (100,263) 3,706,585 One-month LIBOR + 1.50% 3.25 % 5/5/2021 PMI Preclinical 4,282,733 (123,294) 4,159,439 One-month LIBOR + 1.48% 3.38 % 3/5/2021 EcoThrift 2,749,716 (80,867) 2,668,849 One-month LIBOR + 1.21% 2.96 % 7/5/2021 GSA (MSHA) 1,870,731 (64,894) 1,805,837 One-month LIBOR + 1.25% 3.00 % 8/5/2021 PreK San Antonio 5,309,696 (152,084) 5,157,612 4.25% fixed 4.25 % 12/1/2021 Dinan Cars 2,803,705 (75,538) 2,728,167 One-month LIBOR + 2.27% 4.02 % 1/5/2022 ITW Rippey, Solar Turbines, Amec Foster 9,802,538 (252,900) 9,549,638 3.35% fixed 3.35 % 11/1/2026 L-3 Communications 5,447,851 (125,359) 5,322,492 4.50% fixed 4.50 % 4/1/2022 Gap 3,765,419 (91,281) 3,674,138 4.15% fixed 4.15 % 8/1/2023 Dollar General Big Spring 630,208 (27,758) 602,450 4.69% fixed 4.69 % 3/13/2022 Sutter Health 14,603,162 (199,768) 14,403,394 4.50% fixed 4.50 % 3/9/2024 Total $ 63,490,293 $ (1,435,842) $ 62,054,451 (1) Contractual interest rate represents the interest rate in effect under the mortgage notes payable as of March 31, 2018. Effective interest rate is calculated as the actual interest rate in effect as of March 31, 2018 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable) (see Note 7 for information regarding the Company’s derivative instruments). |
Schedule of Maturities of Long-term Debt [Table Text Block] | The following table is a summary of future principal payments on the Company’s mortgage notes payable as of March 31, 2018: April 2018 through December 2018 $ 923,628 2019 3,092,554 2020 1,286,997 2021 23,879,588 2022 25,556,797 2023 3,964,242 Thereafter 4,786,487 Total $ 63,490,293 |
Schedule Of Interest Expenses Reconciliation [Table Text Block] | The following table is a reconciliation of the components of interest expense for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Mortgage notes payable Interest expense (1) $ 614,890 $ 464,648 Amortization of deferred financing costs 86,448 68,258 Unrealized gain on interest rate swaps (see Note 7) (230,216 ) (85,457 ) Sales deposit liability (see Note 5) 13,751 13,751 Total interest expense $ 484,873 $ 461,200 (1) Includes $(5,094) and $(467) for the three months ended March 31, 2018 and 2017, respectively, of monthly payments to settle the Company’s interest rate swaps and $1,181 and $3,913 of accrued interest payable at March 31, 2018 and December 31, 2017, respectively, representing the unsettled portion of the interest rate swap valuation for the period from the most recent settlement date through March 31, 2018 and December 31, 2017, respectively. |
INTEREST RATE SWAP DERIVATIVES
INTEREST RATE SWAP DERIVATIVES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments [Table Text Block] | The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks: March 31, 2018 Derivative Number of Notional Amount Reference Rate Weighted Average Weighted Average Interest Rate 8 $ 22,052,437 One-month LIBOR/Fixed at 2.96%-4.02% 3.42 % 3.10 years (1) The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The maximum notional amount is shown above. The minimum notional amount (outstanding principal balance at the maturity date) is $ 20,546,330 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following table sets forth the fair value of the Company’s derivative instruments as well as their classification in the condensed consolidated balance sheets as of March 31, 2018 and December 31, 2017, respectively. March 31, 2018 December 31, 2017 Derivative Instrument Balance Sheet Location Number of Fair Value Number of Fair Value Interest Rate Swaps Asset - Interest rate swap derivatives, at fair value 8 $ 532,668 7 $ 321,450 Liability Interest rate swap derivatives, at fair value $ 1 $ (18,998) |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping [Table Text Block] | The following were the face value, carrying amount and fair value of the Company’s mortgage notes payable as of March 31, 2018 and December 31, 2017: March 31, 2018 December 31,2017 Face value Carrying value Fair value Face Value Carrying Value Fair Value $ 63,490,293 $ 62,054,451 $ 62,592,027 $ 63,799,677 $ 62,277,387 $ 62,258,522 |
Fair Value, Liabilities Measured on Recurring Basis [Table Text Block] | As of March 31, 2018 and December 31, 2017, the Company measured the following assets and liabilities at fair value: Recurring Basis Total Quoted Prices in Significant Other Significant March 31, 2018: Asset - Interest rate swap derivatives $ 532,668 $ $ 532,668 $ Liability Interest rate swap derivatives $ $ $ $ December 31, 2017: Asset - Interest rate swap derivatives $ 321,450 $ $ 321,450 $ Liability Interest rate swap derivatives $ (18,998) $ $ (18,998) $ |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | The amounts payable or receivable are presented in the condensed consolidated balance sheets as “Due to Affiliates” and “Due from Affiliates.” Three Three March 31, March 31, 2018 March 31, December 31, 2017 Incurred Receivable Payable Incurred Receivable Payable Expensed: Asset management fees $ 201,969 $ $ $ 162,201 $ $ 3,513 Other operating expense reimbursement 47,948 Reimbursable operating expense 83,566 49,566 Fees to affiliates 285,535 162,201 Property management fees * 24,389 17,866 Reimbursable organizational and offering expenses 32,554 32,779 57 Capitalized: Acquisition fees 540,000 Financing coordination fees 100,156 Other: Due to advisor for costs advanced 16,634 16,634 15,000 Total $ $ 66,200 $ $ 51,518 * Property management fees are included in “property expenses” in the accompanying condensed consolidated statement of operations for the three months ended March 31, 2018 and 2017. |
BUSINESS AND ORGANIZATION (Deta
BUSINESS AND ORGANIZATION (Details Textual) | Mar. 31, 2018 |
Noncontrolling Interest, Ownership Percentage by Parent | 70.14% |
CONDENSED CONSOLIDATED BALANC26
CONDENSED CONSOLIDATED BALANCE SHEETS DETAILS (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Tenant receivables, net: | ||
Straight-line rent | $ 1,182,579 | $ 1,082,080 |
Tenant rent | 122,858 | 301,588 |
Unbilled tenant recoveries | 158,826 | 93,420 |
Other | 74,281 | 76,178 |
Accounts Receivable, Gross | 1,538,544 | 1,553,266 |
Less allowance for doubtful accounts | (99,114) | (58,328) |
Net | 1,439,430 | 1,494,938 |
Accounts payable, accrued and other liabilities: | ||
Accounts payable | 216,556 | 45,029 |
Accrued expenses | 498,811 | 205,774 |
Accrued interest payable | 210,777 | 215,700 |
Unearned rent | 558,170 | 518,023 |
Tenant security deposits | 270,106 | 270,273 |
Total | $ 1,754,420 | $ 1,254,632 |
REAL ESTATE INVESTMENTS (Detail
REAL ESTATE INVESTMENTS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Land building and improvements | $ 127,981,198 | |
Tenant origination and absorption costs | 12,699,134 | $ 12,699,134 |
Accumulated depreciation and amortization | (10,735,165) | (9,286,921) |
Total real estate investments, net | $ 129,945,167 | $ 131,166,670 |
Chase Bank & Great Clips [Member] | Antioch, CA [Member] | Retail Site [Member] | ||
Acquisition Date | Aug. 22, 2014 | |
Land building and improvements | $ 3,160,035 | |
Tenant origination and absorption costs | 668,200 | |
Accumulated depreciation and amortization | (1,106,718) | |
Total real estate investments, net | $ 2,721,518 | |
Chevron Gas Station [Member] | San Jose, CA [Member] | Retail Site [Member] | ||
Acquisition Date | May 29, 2015 | |
Land building and improvements | $ 2,775,000 | |
Tenant origination and absorption costs | 0 | |
Accumulated depreciation and amortization | (111,443) | |
Total real estate investments, net | $ 2,663,557 | |
Chevron Gas Station [Member] | Roseville, CA [Member] | Retail Site [Member] | ||
Acquisition Date | Sep. 30, 2015 | |
Land building and improvements | $ 2,800,000 | |
Tenant origination and absorption costs | 0 | |
Accumulated depreciation and amortization | (242,895) | |
Total real estate investments, net | $ 2,557,105 | |
Levins [Member] | Sacramento, CA [Member] | Industrial Property [Member] | ||
Acquisition Date | Aug. 19, 2015 | |
Land building and improvements | $ 3,750,000 | |
Tenant origination and absorption costs | 0 | |
Accumulated depreciation and amortization | (558,808) | |
Total real estate investments, net | $ 3,191,192 | |
Island Pacific Supermarket [Member] | Elk Grove, CA [Member] | Retail Site [Member] | ||
Acquisition Date | Oct. 1, 2015 | |
Land building and improvements | $ 3,151,460 | |
Tenant origination and absorption costs | 568,540 | |
Accumulated depreciation and amortization | (421,266) | |
Total real estate investments, net | $ 3,298,733 | |
Dollar General [Member] | Bakersfield, CA [Member] | Retail Site [Member] | ||
Acquisition Date | Nov. 11, 2015 | |
Land building and improvements | $ 4,632,567 | |
Tenant origination and absorption costs | 689,020 | |
Accumulated depreciation and amortization | (456,094) | |
Total real estate investments, net | $ 4,865,493 | |
Rite Aid [Member] | Lake Elsinore, CA [Member] | Retail Site [Member] | ||
Acquisition Date | Dec. 7, 2015 | |
Land building and improvements | $ 6,663,446 | |
Tenant origination and absorption costs | 968,286 | |
Accumulated depreciation and amortization | (546,731) | |
Total real estate investments, net | $ 7,085,000 | |
PMI Preclinical [Member] | San Carlos, CA [Member] | Industrial Property [Member] | ||
Acquisition Date | Dec. 9, 2015 | |
Land building and improvements | $ 8,920,000 | |
Tenant origination and absorption costs | 0 | |
Accumulated depreciation and amortization | (471,173) | |
Total real estate investments, net | $ 8,448,827 | |
EcoThrift [Member] | Sacramento, CA [Member] | Retail Site [Member] | ||
Acquisition Date | Mar. 17, 2016 | |
Land building and improvements | $ 4,486,993 | |
Tenant origination and absorption costs | 541,729 | |
Accumulated depreciation and amortization | (494,504) | |
Total real estate investments, net | $ 4,534,218 | |
GSA MSHA [Member] | Vacaville, CA [Member] | Office Building [Member] | ||
Acquisition Date | Apr. 5, 2016 | |
Land building and improvements | $ 2,998,232 | |
Tenant origination and absorption costs | 456,645 | |
Accumulated depreciation and amortization | (285,273) | |
Total real estate investments, net | $ 3,169,604 | |
PreK San Antonio [Member] | San Antonio, TX [Member] | Retail Site [Member] | ||
Acquisition Date | Apr. 8, 2016 | |
Land building and improvements | $ 11,851,540 | |
Tenant origination and absorption costs | 1,593,451 | |
Accumulated depreciation and amortization | (1,788,183) | |
Total real estate investments, net | $ 11,656,808 | |
Dollar Tree [Member] | Morrow, GA [Member] | Retail Site [Member] | ||
Acquisition Date | Apr. 22, 2016 | |
Land building and improvements | $ 1,295,879 | |
Tenant origination and absorption costs | 206,844 | |
Accumulated depreciation and amortization | (181,513) | |
Total real estate investments, net | $ 1,321,210 | |
Dinan Cars [Member] | Morgan Hill, CA [Member] | Industrial Property [Member] | ||
Acquisition Date | Jun. 21, 2016 | |
Land building and improvements | $ 4,651,845 | |
Tenant origination and absorption costs | 654,155 | |
Accumulated depreciation and amortization | (681,243) | |
Total real estate investments, net | $ 4,624,757 | |
ITW Rippey [Member] | El Dorado, CA [Member] | Industrial Property [Member] | ||
Acquisition Date | Aug. 18, 2016 | |
Land building and improvements | $ 6,178,204 | |
Tenant origination and absorption costs | 407,316 | |
Accumulated depreciation and amortization | (375,774) | |
Total real estate investments, net | $ 6,209,746 | |
Solar Turbines [Member] | San Diego, CA [Member] | Office Building [Member] | ||
Acquisition Date | Jul. 21, 2016 | |
Land building and improvements | $ 5,556,726 | |
Tenant origination and absorption costs | 389,718 | |
Accumulated depreciation and amortization | (478,988) | |
Total real estate investments, net | $ 5,467,456 | |
Amec Foster [Member] | San Diego, CA [Member] | Industrial Property [Member] | ||
Acquisition Date | Jul. 21, 2016 | |
Land building and improvements | $ 7,003,261 | |
Tenant origination and absorption costs | 485,533 | |
Accumulated depreciation and amortization | (323,469) | |
Total real estate investments, net | $ 7,165,325 | |
Dollar General Big Spring [Member] | Big Spring, TX [Member] | Retail Site [Member] | ||
Acquisition Date | Nov. 4, 2016 | |
Land building and improvements | $ 1,161,647 | |
Tenant origination and absorption costs | 112,958 | |
Accumulated depreciation and amortization | (41,764) | |
Total real estate investments, net | $ 1,232,841 | |
Gap [Member] | Rocklin, CA [Member] | Office Building [Member] | ||
Acquisition Date | Dec. 1, 2016 | |
Land building and improvements | $ 7,220,909 | |
Tenant origination and absorption costs | 677,191 | |
Accumulated depreciation and amortization | (412,589) | |
Total real estate investments, net | $ 7,485,512 | |
L-3 Communications [Member] | San Diego, CA [Member] | Industrial Property [Member] | ||
Acquisition Date | Dec. 23, 2016 | |
Land building and improvements | $ 10,799,500 | |
Tenant origination and absorption costs | 961,107 | |
Accumulated depreciation and amortization | (458,129) | |
Total real estate investments, net | $ 11,302,478 | |
Sutter Health [Member] | Rancho Cordova, CA [Member] | Office Building [Member] | ||
Acquisition Date | Mar. 15, 2017 | |
Land building and improvements | $ 24,256,632 | |
Tenant origination and absorption costs | 2,870,258 | |
Accumulated depreciation and amortization | (1,207,138) | |
Total real estate investments, net | $ 25,919,752 | |
Walgreens [Member] | Santa Maria, CA [Member] | Retail Site [Member] | ||
Acquisition Date | Jun. 29, 2017 | |
Land building and improvements | $ 4,667,322 | |
Tenant origination and absorption costs | 448,183 | |
Accumulated depreciation and amortization | (91,470) | |
Total real estate investments, net | $ 5,024,035 |
REAL ESTATE INVESTMENTS (Deta28
REAL ESTATE INVESTMENTS (Details 1) | Mar. 31, 2018USD ($) |
April 2018 through December 2018 | $ 7,393,136 |
2,019 | 10,027,621 |
2,020 | 10,228,801 |
2,021 | 9,260,672 |
2,022 | 7,714,989 |
2,023 | 5,914,111 |
Thereafter | 26,097,425 |
Operating Leases, Future Minimum Payments Receivable | $ 76,636,755 |
REAL ESTATE INVESTMENTS (Deta29
REAL ESTATE INVESTMENTS (Details 2) - Sutter Health, CA [Member] | 3 Months Ended | |
Mar. 31, 2018USD ($) | ||
Effective Annualized Base Rent | $ 1,920,911 | [1] |
Percentage of Annualized Base Rent | 19.60% | |
[1] | Effective Annualized Base Rent is calculated based on the monthly base rent at March 31, 2018 for twelve months. |
REAL ESTATE INVESTMENTS (Deta30
REAL ESTATE INVESTMENTS (Details 3) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Below-Market Leases, Cost | $ (5,349,909) | |
Below-Market Leases, Accumulated amortization | 1,598,942 | |
Below-Market Leases, Net Amount | (3,750,967) | $ (3,966,008) |
Tenant Origination and Absorption Costs [Member] | ||
Finite-Lived Intangible Assets, Cost | 12,699,134 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (3,248,171) | |
Finite-Lived Intangible Assets, Net Amount | 9,450,963 | |
Above-Market Leases [Member] | ||
Finite-Lived Intangible Assets, Cost | 872,408 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (64,056) | |
Finite-Lived Intangible Assets, Net Amount | $ 808,352 |
REAL ESTATE INVESTMENTS (Deta31
REAL ESTATE INVESTMENTS (Details 4) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Below Market Lease, Net | $ (3,750,967) | $ (3,966,008) |
Tenant Origination and Absorption Costs [Member] | ||
April 2018 through December 2018 | 1,175,544 | |
2,019 | 1,567,391 | |
2,020 | 1,567,392 | |
2,021 | 1,320,274 | |
2,022 | 1,239,699 | |
2,023 | 1,128,431 | |
Thereafter | 1,452,232 | |
Finite-Lived Intangible Assets, Net | $ 9,450,963 | |
Weighted average remaining amortization period | 8 years 3 months 18 days | |
Above-Market Leases [Member] | ||
April 2018 through December 2018 | $ 26,490 | |
2,019 | 35,320 | |
2,020 | 35,320 | |
2,021 | 35,320 | |
2,022 | 35,320 | |
2,023 | 35,320 | |
Thereafter | 605,262 | |
Finite-Lived Intangible Assets, Net | $ 808,352 | |
Weighted average remaining amortization period | 35 years 6 months | |
Below-Market Leases [Member] | ||
Weighted average remaining amortization period | 5 years 3 months 18 days | |
Remaining 2,017 | $ (645,123) | |
2,018 | (860,165) | |
2,019 | (860,165) | |
2,022 | (667,541) | |
2,021 | (667,541) | |
2,022 | (50,432) | |
Thereafter | 0 | |
Below Market Lease, Net | $ (3,750,967) |
REAL ESTATE INVESTMENTS (Deta32
REAL ESTATE INVESTMENTS (Details Textual) | 3 Months Ended |
Mar. 31, 2018 | |
Finite-Lived Intangible Asset, Useful Life | 9 years 7 months 6 days |
SALE OF INTEREST IN REAL ESTA33
SALE OF INTEREST IN REAL ESTATE INVESTMENT PROPERTY (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Proceeds from Sale of Real Estate | $ 1,000,000 | |||
Interest Expense, Customer Deposits | $ 13,751 | $ 13,751 | ||
Customer Advances and Deposits | $ 1,000,000 | $ 1,000,000 | ||
Chevron Gas Station [Member] | ||||
Equity Method Investment, Ownership Percentage | 29.86% | 29.90% |
DEBT (Details)
DEBT (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | ||
Principal Amount | $ 62,054,451 | $ 62,277,387 | |
Mortgages [Member] | |||
Principal Amount | 63,490,293 | ||
Deferred Financing Costs | (1,435,842) | ||
Net Balance | 62,054,451 | ||
Mortgages [Member] | Chase Bank & Great Clips [Member] | |||
Principal Amount | 1,878,982 | ||
Deferred Financing Costs | (19,352) | ||
Net Balance | $ 1,859,630 | ||
Contractual Interest Rate | 4.37% fixed | ||
Effective Interest Rate | [1] | 4.37% | |
Loan Maturity | Feb. 5, 2019 | ||
Mortgages [Member] | Levins [Member] | |||
Principal Amount | $ 2,158,735 | ||
Deferred Financing Costs | (33,540) | ||
Net Balance | $ 2,125,195 | ||
Contractual Interest Rate | One-month LIBOR + 1.93% | ||
Effective Interest Rate | [1] | 3.74% | |
Loan Maturity | Jan. 5, 2021 | ||
Mortgages [Member] | Island Pacific Supermarket [Member] | |||
Principal Amount | $ 1,963,009 | ||
Deferred Financing Costs | (35,231) | ||
Net Balance | $ 1,927,778 | ||
Contractual Interest Rate | One-month LIBOR + 1.93% | ||
Effective Interest Rate | [1] | 3.74% | |
Loan Maturity | Jan. 5, 2021 | ||
Mortgages [Member] | Dollar General [Member] | |||
Principal Amount | $ 2,416,960 | ||
Deferred Financing Costs | (53,713) | ||
Net Balance | $ 2,363,247 | ||
Contractual Interest Rate | One-month LIBOR + 1.48% | ||
Effective Interest Rate | [1] | 3.38% | |
Loan Maturity | Mar. 5, 2021 | ||
Mortgages [Member] | Rite Aid [Member] | |||
Principal Amount | $ 3,806,848 | ||
Deferred Financing Costs | (100,263) | ||
Net Balance | $ 3,706,585 | ||
Contractual Interest Rate | One-month LIBOR + 1.50% | ||
Effective Interest Rate | [1] | 3.25% | |
Loan Maturity | May 5, 2021 | ||
Mortgages [Member] | PMI Preclinical [Member] | |||
Principal Amount | $ 4,282,733 | ||
Deferred Financing Costs | (123,294) | ||
Net Balance | $ 4,159,439 | ||
Contractual Interest Rate | One-month LIBOR + 1.48% | ||
Effective Interest Rate | [1] | 3.38% | |
Loan Maturity | Mar. 5, 2021 | ||
Mortgages [Member] | EcoThrift [Member] | |||
Principal Amount | $ 2,749,716 | ||
Deferred Financing Costs | (80,867) | ||
Net Balance | $ 2,668,849 | ||
Contractual Interest Rate | One-month LIBOR + 1.21% | ||
Effective Interest Rate | [1] | 2.96% | |
Loan Maturity | Jul. 5, 2021 | ||
Mortgages [Member] | PreK San Antonio [Member] | |||
Principal Amount | $ 5,309,696 | ||
Deferred Financing Costs | (152,084) | ||
Net Balance | $ 5,157,612 | ||
Contractual Interest Rate | 4.25% fixed | ||
Effective Interest Rate | [1] | 4.25% | |
Loan Maturity | Dec. 1, 2021 | ||
Mortgages [Member] | GSA (MSHA) [Member] | |||
Principal Amount | $ 1,870,731 | ||
Deferred Financing Costs | (64,894) | ||
Net Balance | $ 1,805,837 | ||
Contractual Interest Rate | One-month LIBOR + 1.25% | ||
Effective Interest Rate | [1] | 3.00% | |
Loan Maturity | Aug. 5, 2021 | ||
Mortgages [Member] | Dinan Cars [Member] | |||
Principal Amount | $ 2,803,705 | ||
Deferred Financing Costs | (75,538) | ||
Net Balance | $ 2,728,167 | ||
Contractual Interest Rate | One-month LIBOR + 2.27% | ||
Effective Interest Rate | [1] | 4.02% | |
Loan Maturity | Jan. 5, 2022 | ||
Mortgages [Member] | ITW Rippey, Solar Turbines, Amec Foster [Member] | |||
Principal Amount | $ 9,802,538 | ||
Deferred Financing Costs | (252,900) | ||
Net Balance | $ 9,549,638 | ||
Contractual Interest Rate | 3.35% fixed | ||
Effective Interest Rate | [1] | 3.35% | |
Loan Maturity | Nov. 1, 2026 | ||
Mortgages [Member] | Dollar General Big Spring [Member] | |||
Principal Amount | $ 630,208 | ||
Deferred Financing Costs | (27,758) | ||
Net Balance | $ 602,450 | ||
Contractual Interest Rate | 4.69% fixed | ||
Effective Interest Rate | [1] | 4.69% | |
Loan Maturity | Mar. 13, 2022 | ||
Mortgages [Member] | L-3 Communications [Member] | |||
Principal Amount | $ 5,447,851 | ||
Deferred Financing Costs | (125,359) | ||
Net Balance | $ 5,322,492 | ||
Contractual Interest Rate | 4.50% fixed | ||
Effective Interest Rate | [1] | 4.50% | |
Loan Maturity | Apr. 1, 2022 | ||
Mortgages [Member] | Sutter Health [Member] | |||
Principal Amount | $ 14,603,162 | ||
Deferred Financing Costs | (199,768) | ||
Net Balance | $ 14,403,394 | ||
Contractual Interest Rate | 4.50% fixed | ||
Effective Interest Rate | [1] | 4.50% | |
Loan Maturity | Mar. 9, 2024 | ||
Mortgages [Member] | Gap [Member] | |||
Principal Amount | $ 3,765,419 | ||
Deferred Financing Costs | (91,281) | ||
Net Balance | $ 3,674,138 | ||
Contractual Interest Rate | 4.15% fixed | ||
Effective Interest Rate | [1] | 4.15% | |
Loan Maturity | Aug. 1, 2023 | ||
[1] | Contractual interest rate represents the interest rate in effect under the mortgage notes payable as of March 31, 2018. Effective interest rate is calculated as the actual interest rate in effect as of March 31, 2018 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable) (see Note 7 for information regarding the Company’s derivative instruments). |
DEBT (Details 1)
DEBT (Details 1) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Total | $ 62,054,451 | $ 62,277,387 |
Secured Debt [Member] | ||
April 2018 through December 2018 | 923,628 | |
2,019 | 3,092,554 | |
2,020 | 1,286,997 | |
2,021 | 23,879,588 | |
2,022 | 25,556,797 | |
2,023 | 3,964,242 | |
Thereafter | 4,786,487 | |
Total | $ 63,490,293 |
DEBT (Details 2)
DEBT (Details 2) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Unrealized gain on interest rate swaps (see Note 7) | $ 230,216 | $ 85,457 | |
Sales deposit liability (see Note 5) | 13,751 | 13,751 | |
Total interest expense | 484,873 | 461,200 | |
Unsecured Debt [Member] | |||
Sales deposit liability (see Note 5) | 13,751 | 13,751 | |
Total interest expense | 484,873 | 461,200 | |
Secured Debt [Member] | |||
Interest expense | [1] | 614,890 | 464,648 |
Amortization of deferred financing costs | 86,448 | 68,258 | |
Unrealized gain on interest rate swaps (see Note 7) | $ (230,216) | $ (85,457) | |
[1] | Includes $(5,094) and $(467) for the three months ended March 31, 2018 and 2017, respectively, of monthly payments to settle the Company’s interest rate swaps and $1,181 and $3,913 of accrued interest payable at March 31, 2018 and December 31, 2017, respectively, representing the unsettled portion of the interest rate swap valuation for the period from the most recent settlement date through March 31, 2018 and December 31, 2017, respectively. |
DEBT (Details Textual)
DEBT (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Interest Expenses, Interest Rate Swap | $ (5,094) | $ (467) | |
Liabilities Accrued Interest Payable | $ 1,181 | $ 3,913 |
INTEREST RATE SWAP DERIVATIVE38
INTEREST RATE SWAP DERIVATIVES (Details) - Interest Rate Swap Derivatives [Member] | 3 Months Ended | |
Mar. 31, 2018USD ($)Numbers | ||
Derivative Instruments, Number of Instruments | Numbers | 8 | |
Derivative Instruments, Notional Amount | $ | $ 22,052,437 | [1] |
Derivative Instruments, Reference Rate | One-month LIBOR/Fixed at 2.96%-4.02% | |
Derivative Instruments, Weighted Average Fixed Pay Rate | 3.42% | |
Derivative Instruments, Weighted Average Remaining Term | 3 years 1 month 6 days | |
[1] | The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The maximum notional amount is shown above. The minimum notional amount (outstanding principal balance at the maturity date) is $20,546,330 |
INTEREST RATE SWAP DERIVATIVE39
INTEREST RATE SWAP DERIVATIVES (Details 1) | 3 Months Ended | |
Mar. 31, 2018USD ($)NumbersNumber | Dec. 31, 2017USD ($)NumbersNumber | |
Derivative Instrument, Fair Value | $ 0 | $ 18,998 |
Interest Rate Swap [Member] | ||
Derivative Instruments, Number of Instruments | Numbers | 8 | |
Interest Rate Swap [Member] | Liability [Member] | ||
Derivative Instrument, Balance Sheet Location | Liability – Interest rate swap derivatives, at fair value | |
Derivative Instruments, Number of Instruments | Number | 0 | 1 |
Derivative Instrument, Fair Value | $ 0 | $ (18,998) |
Interest Rate Swap [Member] | Assets [Member] | ||
Derivative Instrument, Balance Sheet Location | Asset - Interest rate swap derivatives, at fair value | |
Derivative Instruments, Number of Instruments | Numbers | 8 | 7 |
Derivative Instrument, Fair Value | $ 532,668 | $ 321,450 |
INTEREST RATE SWAP DERIVATIVE40
INTEREST RATE SWAP DERIVATIVES (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Unrealized (Gain) Loss on Derivatives | $ 230,216 | $ 85,457 | |
Interest Rate Swap [Member] | |||
Derivative, Notional Amount | [1] | 22,052,437 | |
Unrealized (Gain) Loss on Derivatives | 230,216 | $ 85,457 | |
Maximum [Member] | |||
Derivative, Notional Amount | $ 20,546,330 | ||
[1] | The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The maximum notional amount is shown above. The minimum notional amount (outstanding principal balance at the maturity date) is $20,546,330 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument, Face Value | $ 63,490,293 | $ 63,799,677 |
Debt Instrument, Carrying Value | 62,054,451 | 62,277,387 |
Debt Instrument, Fair Value | $ 62,592,027 | $ 62,258,522 |
FAIR VALUE DISCLOSURES (Detai42
FAIR VALUE DISCLOSURES (Details 1) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Asset - Interest rate swap derivatives | $ 532,668 | $ 321,450 |
Liability - Interest rate swap derivatives | 0 | (18,998) |
Fair Value, Measurements, Recurring [Member] | ||
Asset - Interest rate swap derivatives | 532,668 | 321,450 |
Liability - Interest rate swap derivatives | (18,998) | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Asset - Interest rate swap derivatives | 0 | 0 |
Liability - Interest rate swap derivatives | 0 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Asset - Interest rate swap derivatives | 532,668 | 321,450 |
Liability - Interest rate swap derivatives | (18,998) | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Asset - Interest rate swap derivatives | $ 0 | 0 |
Liability - Interest rate swap derivatives | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | ||
Due to Related Parties | $ 66,200 | $ 51,518 | ||
Due from Related Parties | 0 | 0 | ||
Advisor fees, Acquisition fees [Member] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 0 | $ 540,000 | ||
Due to Related Parties | 0 | 0 | ||
Due from Related Parties | 0 | 0 | ||
Advisor fees, Asset management fees [Member] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 201,969 | 162,201 | ||
Due to Related Parties | 0 | 3,513 | ||
Due from Related Parties | 0 | 0 | ||
Advisor fees, Property management fees [Member] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | [1] | 24,389 | 17,866 | |
Due to Related Parties | [1] | 0 | 0 | |
Due from Related Parties | [1] | 0 | 0 | |
Other operating expense reimbursement [Member] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 0 | 0 | ||
Due to Related Parties | 0 | 47,948 | ||
Due from Related Parties | 0 | 0 | ||
Reimbursable organizational and offering expenses [Member] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 32,554 | 32,779 | ||
Due to Related Parties | 0 | 57 | ||
Due from Related Parties | 0 | 0 | ||
Fees To Affliates [Member] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 285,535 | 162,201 | ||
Financing Coordination Fees [Member] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 0 | 100,156 | ||
Due to Related Parties | 0 | 0 | ||
Due from Related Parties | 0 | 0 | ||
Due to other SSLFO [Member] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 16,634 | 15,000 | ||
Due to Related Parties | 16,634 | 0 | ||
Due from Related Parties | 0 | 0 | ||
Advisor Fees, Reimbursable operating expenses [Member] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 83,566 | $ 0 | ||
Due to Related Parties | 49,566 | 0 | ||
Due from Related Parties | $ 0 | $ 0 | ||
[1] | Property management fees are included in “property expenses” in the accompanying condensed consolidated statement of operations for the three months ended March 31, 2018 and 2017. |
RELATED PARTY TRANSACTIONS (D44
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | ||
Due to Related Parties | $ 66,200 | $ 51,518 | ||
Organization and Offering Expenses | 2,719,961 | |||
Organization and Offering Expenses [Member] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 2,719,961 | 2,687,464 | ||
Organization and Offering Expenses Payable | 0 | |||
Organization and Offering Expenses Receivable | 57 | |||
Advisor fees, Acquisition fees [Member] | ||||
Due to Related Parties | 0 | 0 | ||
Related Party Transaction, Expenses from Transactions with Related Party | $ 0 | $ 540,000 | ||
Related Party Transaction, Rate | 3.00% | |||
Advisor fees, Acquisition fees [Member] | Maximum [Member] | ||||
Related Party Transaction, Rate | 6.00% | |||
Advisor fees, Asset management fees [Member] | ||||
Due to Related Parties | $ 0 | 3,513 | ||
Related Party Transaction, Expenses from Transactions with Related Party | $ 201,969 | 162,201 | ||
Related Party Transaction, Rate | 0.05% | |||
Advisor fees, Financing fee [Member] | ||||
Related Party Transaction, Rate | 1.00% | |||
Advisor fees, Property management fees [Member] | ||||
Due to Related Parties | [1] | $ 0 | 0 | |
Related Party Transaction, Expenses from Transactions with Related Party | [1] | $ 24,389 | 17,866 | |
Related Party Transaction, Rate | 1.50% | |||
Advisor fees, Disposition fees [Member] | ||||
Related Party Transaction, Rate | 6.00% | |||
Leasing Commission Fees [Member] | ||||
Related Party Transaction, Rate | 3.00% | |||
Operating Expenses [Member] | ||||
Related Party Transaction, Expense Reimbursement Percentage to Average Invested Assets | 2.00% | |||
Related Party Transaction, Expense Reimbursement Percentage to Net Income | 25.00% | |||
Rich Uncles, LLC [Member] | ||||
Repayments of Related Party Debt | $ 2,719,961 | 2,687,407 | ||
Advisor Fees, Reimbursable operating expenses [Member] | ||||
Due to Related Parties | 49,566 | 0 | ||
Related Party Transaction, Expenses from Transactions with Related Party | 83,566 | 0 | ||
Other Operating Expense Reimbursement [Member] | ||||
Due to Related Parties | 0 | $ 47,948 | ||
Related Party Transaction, Expenses from Transactions with Related Party | $ 0 | $ 0 | ||
Advisor or Affiliates [Member] | Advisor fees, Disposition fees [Member] | ||||
Related Party Transaction, Rate | 3.00% | |||
Advisor or Affiliates [Member] | Leasing Commission Fees [Member] | ||||
Related Party Transaction, Rate | 6.00% | |||
[1] | Property management fees are included in “property expenses” in the accompanying condensed consolidated statement of operations for the three months ended March 31, 2018 and 2017. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Payments for Tenant Improvements | $ 553,088 | $ 553,088 |
Restricted Cash and Cash Equivalents | $ 462,140 | $ 462,140 |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) - USD ($) | May 04, 2018 | May 15, 2018 | Apr. 24, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Share Repurchase Payable | $ 1,171,406 | $ 612,099 | |||
Subsequent Event [Member] | |||||
Dividends Payable, Date Declared | Apr. 24, 2018 | ||||
Dividends Payable, Amount Per Share | $ 0.002083 | ||||
Dividends Payable | $ 1,574,919 | ||||
Dividends Payable, Date to be Paid | Apr. 25, 2018 | ||||
Dividend Reinvested | $ 1,040,365 | ||||
Stock Repurchased During Period, Value | $ 0 | ||||
Advisor Disposal Fee | $ 114,000 | ||||
Subsequent Event [Member] | Chevron Gas Station [Member] | |||||
Disposal Group, Including Discontinued Operation, Consideration | 3,800,000 | ||||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | 875,000 | ||||
Subsequent Event [Member] | Mortgages [Member] | |||||
Stock Repurchased During Period, Shares | 106,043 | ||||
Share Repurchase Payable | $ 1,130,415 |