Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2016 | Feb. 01, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | MONMOUTH REAL ESTATE INVESTMENT CORP | |
Entity Central Index Key | 67,625 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 70,969,828 | |
Trading Symbol | MNR | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 |
Real Estate Investments: | ||
Land | $ 168,082,315 | $ 165,375,315 |
Buildings and Improvements | 1,055,810,320 | 1,005,938,180 |
Total Real Estate Investments | 1,223,892,635 | 1,171,313,495 |
Accumulated Depreciation | (154,847,979) | (148,830,169) |
Net Real Estate Investments | 1,069,044,656 | 1,022,483,326 |
Cash and Cash Equivalents | 30,722,606 | 95,749,508 |
Securities Available for Sale at Fair Value | 74,321,496 | 73,604,894 |
Tenant and Other Receivables | 2,289,863 | 1,444,824 |
Deferred Rent Receivable | 7,226,370 | 6,917,431 |
Prepaid Expenses | 7,476,019 | 4,830,987 |
Capitalized Lease Costs, net of Accumulated Amortization of $3,443,958 and $3,238,516, respectively | 4,040,326 | 4,165,268 |
Intangible Assets, net of Accumulated Amortization of $12,600,446 and $12,332,599, respectively | 5,999,845 | 5,816,153 |
Financing Costs, net of Accumulated Amortization of $339,167 and $246,678, respectively | 1,156,096 | 1,245,923 |
Other Assets | 7,402,948 | 7,227,571 |
TOTAL ASSETS | 1,209,680,225 | 1,223,485,885 |
Liabilities: | ||
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs | 505,574,117 | 477,476,010 |
Loans Payable | 76,000,000 | 80,790,684 |
Accounts Payable and Accrued Expenses | 2,781,619 | 3,998,771 |
Other Liabilities | 14,186,980 | 9,868,572 |
Preferred Stock Called for Redemption | 0 | 53,493,750 |
Total Liabilities | 598,542,716 | 625,627,787 |
COMMITMENTS AND CONTINGENCIES | ||
Shareholders' Equity: | ||
Common Stock - $0.01 Par Value Per Share: 196,739,750 and 194,600,000 Shares Authorized as of December 31, 2016 and September 30, 2016, respectively; 70,536,720 and 68,920,972 Shares Issued and Outstanding as of December 31, 2016 and September 30, 2016, respectively | 705,367 | 689,210 |
Excess Stock - $0.01 Par Value Per Share: 200,000,000 Shares Authorized as of December 31, 2016 and September 30, 2016; No Shares Issued or Outstanding as of December 31, 2016 and September 30, 2016 | 0 | 0 |
Additional Paid-In Capital | 407,737,024 | 391,726,621 |
Accumulated Other Comprehensive Income | 10,195,118 | 12,942,267 |
Undistributed Income | 0 | 0 |
Total Shareholders' Equity | 611,137,509 | 597,858,098 |
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | 1,209,680,225 | 1,223,485,885 |
Series B Preferred Stock [Member] | ||
Shareholders' Equity: | ||
Preferred Stock, Value | 57,500,000 | 57,500,000 |
Series C Preferred Stock [Member] | ||
Shareholders' Equity: | ||
Preferred Stock, Value | $ 135,000,000 | $ 135,000,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 |
Accumulated amortization of lease costs | $ 3,443,958 | $ 3,238,516 |
Accumulated amortization of intangible assets | 12,600,446 | 12,332,599 |
Accumulated amortization of financing costs | $ 339,167 | $ 246,678 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 196,739,750 | 194,600,000 |
Common Stock, shares issued | 70,536,720 | 68,920,972 |
Common Stock, shares outstanding | 70,536,720 | 68,920,972 |
Excess Stock, par value | $ 0.01 | $ 0.01 |
Excess Stock , shares authorized | 200,000,000 | 200,000,000 |
Excess Stock , shares issued | ||
Excess Stock , shares outstanding | ||
Series B Preferred Stock [Member] | ||
Cumulative redeemable preferred, stock dividend rate | 7.875% | 7.875% |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,300,000 | 2,300,000 |
Preferred stock, shares issued | 2,300,000 | 2,300,000 |
Preferred stock, shares outstanding | 2,300,000 | 2,300,000 |
Series C Preferred Stock [Member] | ||
Cumulative redeemable preferred, stock dividend rate | 6.125% | 6.125% |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,400,000 | 5,400,000 |
Preferred stock, shares issued | 5,400,000 | 5,400,000 |
Preferred stock, shares outstanding | 5,400,000 | 5,400,000 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
INCOME: | ||
Rental Revenue | $ 23,280,856 | $ 19,064,919 |
Reimbursement Revenue | 3,900,755 | 3,194,443 |
TOTAL INCOME | 27,181,611 | 22,259,362 |
EXPENSES: | ||
Real Estate Taxes | 2,906,981 | 2,372,136 |
Operating Expenses | 1,294,468 | 1,231,365 |
General & Administrative Expenses | 1,442,463 | 1,335,964 |
Acquisition Costs | 178,526 | 145,585 |
Depreciation | 6,992,495 | 5,595,432 |
Amortization of Capitalized Lease Costs and Intangible Assets | 447,797 | 486,611 |
TOTAL EXPENSES | 13,262,730 | 11,167,093 |
OTHER INCOME (EXPENSE): | ||
Dividend and Interest Income | 1,292,151 | 1,184,653 |
Gain on Sale of Securities Transactions, net | 806,108 | 8,380 |
Interest Expense, including Amortization of Financing Costs | (6,163,219) | (5,346,647) |
TOTAL OTHER INCOME (EXPENSE) | (4,064,960) | (4,153,614) |
NET INCOME | 9,853,921 | 6,938,655 |
Less: Preferred Dividends | 3,697,760 | 2,151,758 |
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 6,156,161 | $ 4,786,897 |
BASIC INCOME - PER SHARE | ||
Net Income | $ 0.14 | $ 0.11 |
Less: Preferred Dividends | (0.05) | (0.03) |
Net Income Attributable to Common Shareholders - Basic | 0.09 | 0.08 |
DILUTED INCOME - PER SHARE | ||
Net Income | 0.14 | 0.11 |
Less: Preferred Dividends | (0.05) | (0.03) |
Net Income Attributable to Common Shareholders - Diluted | $ 0.09 | $ 0.08 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||
Basic | 69,686,153 | 62,866,898 |
Diluted | 69,829,793 | 62,948,800 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income | $ 9,853,921 | $ 6,938,655 |
Other Comprehensive Income: | ||
Unrealized Holding Gains (Losses) Arising During the Period | (1,941,041) | 1,790,142 |
Reclassification Adjustment for Net Gains of Sales of Securities Transactions Realized in Income | (806,108) | (8,380) |
TOTAL COMPREHENSIVE INCOME | 7,106,772 | 8,720,417 |
Less: Preferred Dividends | 3,697,760 | 2,151,758 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 3,409,012 | $ 6,568,659 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income | $ 9,853,921 | $ 6,938,655 |
Noncash Items Included in Net Income: | ||
Depreciation & Amortization | 7,721,205 | 6,316,410 |
Stock Compensation Expense | 100,155 | 104,961 |
Gain on Sale of Securities Transactions, net | (806,108) | (8,380) |
Loss on Sale of Real Estate Investment | 95,336 | 0 |
Changes In: | ||
Tenant, Deferred Rent and Other Receivables | (598,700) | (898,233) |
Prepaid Expenses | (2,645,032) | (2,594,298) |
Other Assets and Capitalized Lease Costs | (428,282) | (203,940) |
Accounts Payable, Accrued Expenses and Other Liabilities | 860,211 | 1,981,853 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 14,152,706 | 11,637,028 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of Real Estate and Intangible Assets | (56,101,538) | (50,385,897) |
Capital Improvements | (696,941) | (860,167) |
Proceeds on Sale of Real Estate | 4,125,819 | 0 |
Return of Deposits on Real Estate | 1,000,000 | 900,000 |
Deposits Paid on Acquisitions of Real Estate | (820,000) | (550,000) |
Proceeds from Sale of Securities Available for Sale | 3,738,938 | 1,790,403 |
Purchase of Securities Available for Sale | (6,396,581) | (6,491,654) |
NET CASH USED IN INVESTING ACTIVITIES | (55,150,303) | (55,597,315) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net (Repayments) Proceeds from Loans Payable | (4,790,684) | 14,938,116 |
Proceeds from Fixed Rate Mortgage Notes Payable | 38,000,000 | 33,670,000 |
Principal Payments on Fixed Rate Mortgage Notes Payable | (9,456,016) | (6,941,017) |
Financing Costs Paid on Debt | (636,963) | (404,674) |
Proceeds from the Exercise of Stock Options | 0 | 924,300 |
Redemption of Series A Preferred Stock | (53,493,750) | 0 |
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments | 18,877,487 | 12,575,537 |
Preferred Dividends Paid | (3,422,136) | (2,151,758) |
Common Dividends Paid, net of Reinvestments | (9,107,243) | (7,797,202) |
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (24,029,305) | 44,813,302 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (65,026,902) | 853,015 |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 95,749,508 | 12,073,909 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ 30,722,606 | $ 12,926,924 |
Organization and Accounting Pol
Organization and Accounting Policies | 3 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Accounting Policies | NOTE 1 – ORGANIZATION AND ACCOUNTING POLICIES Monmouth Real Estate Investment Corporation, a Maryland corporation, together with its consolidated subsidiaries (MREIC, the Company, or we), operates as a real estate investment trust (REIT) deriving its income primarily from real estate rental operations. As of December 31, 2016, the Company owned one hundred properties with total square footage of approximately 16,554,000, which is 100.0% occupied, as compared to ninety-nine properties with total square footage of approximately 16,010,000, which was 99.6% occupied as of September 30, 2016. These properties are located in thirty states: Alabama, Arizona, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington and Wisconsin. The Company also owns a portfolio of REIT investment securities which the Company generally limits to no more than approximately 10% of its undepreciated assets, (which is the Company’s total assets excluding accumulated depreciation). The Company has elected to be taxed as a REIT under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the Code), and intends to maintain its qualification as a REIT in the future. As a qualified REIT, with limited exceptions, the Company will not be taxed under Federal and certain state income tax laws at the corporate level on taxable income that it distributes to its shareholders. For special tax provisions applicable to REITs, refer to Sections 856-860 of the Code. The Company is subject to franchise taxes in several of the states in which the Company owns property. The interim Consolidated Financial Statements furnished herein have been prepared in accordance with Accounting Principles Generally Accepted in the United States of America (U.S. GAAP) applicable to interim financial information, the instructions to Form 10-Q, and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended December 31, 2016 are not necessarily indicative of the results that may be expected for the year ending September 30, 2017. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2016. Use of Estimates In preparing the financial statements in accordance with U.S. GAAP, management is required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods and related disclosure of contingent assets and liabilities. Actual results could differ from these estimates and assumptions. Reclassification Certain prior period amounts in the accompanying Consolidated Financial Statements have been reclassified to conform to the current period’s presentation. Lease Termination Income Lease Termination Income is recognized in operating revenues when there is a signed termination agreement, all of the conditions of the agreement have been met, the tenant is no longer occupying the property and the termination consideration is probable of collection. Lease termination amounts are paid by tenants who want to terminate their lease obligations before the end of the contractual term of the lease by agreement with the Company. Of the Company’s one hundred properties, only three leases contain an early termination provision. These leases with an early termination provision are the 26,340 square foot location in Ridgeland (Jackson), MS, the 83,000 square foot location in Roanoke, VA and the 102,135 square foot location in O’Fallon (St. Louis), MO. Stock Compensation Plan The Company has a Stock Option and Stock Award Plan, adopted in 2007 and amended and restated in 2010 (the 2007 Plan), authorizing the grant to officers and key employees of options to purchase up to 1,500,000 shares of common stock, $0.01 par value per share (common stock) including up to 100,000 shares of restricted stock awarded to any one participant in any one fiscal year. The Company accounts for awards of stock options and restricted stock in accordance with ASC 718-10, “Compensation-Stock Compensation”. ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period). The compensation cost for stock option grants is determined using option pricing models, intended to estimate the fair value of the awards at the grant date less estimated forfeitures. The compensation expense for restricted stock is recognized based on the fair value of the restricted stock awards less estimated forfeitures. The fair value of restricted stock awards is equal to the fair value of the Company’s stock on the grant date. The amortization of compensation costs for stock option grants and restricted stock are included in General and Administrative Expenses in the accompanying Consolidated Statements of Income and amounted to $100,155 and $104,961 for the three months ended December 31, 2016 and 2015, respectively. During the three months ended December 31, 2015, no stock options were granted under the Company’s 2007 Plan. During the three months ended December 31, 2016, the following stock options, which vest one year after grant date, were granted under the Company’s 2007 Plan: Date of Grant Number of Employees Number of Shares Option Price Expiration Date 12/9/16 10 215,000 $ 14.24 12/9/24 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used for grants in the fiscal year indicated: Fiscal 2017 Dividend yield 4.49 % Expected volatility 18.88 % Risk-free interest rate 2.26 % Expected lives (years) 8 Estimated forfeitures -0- The fair value of options granted during the three months ended December 31, 2016 was $1.45 per option. During the three months ended December 31, 2016 and 2015, no shares of restricted stock were granted under the Company’s 2007 Plan. During the three months ended December 31, 2015, four participants exercised options to purchase an aggregate of 115,000 shares of common stock at a weighted average exercise price of $8.04 per share for total proceeds of $924,300. During the three months ended December 31, 2016, no options were exercised. As of December 31, 2016, a total of 229,878 shares were available to grant as stock options or as restricted stock and there were outstanding options to purchase 670,000 shares under the 2007 Plan. The aggregate intrinsic value of options outstanding as of December 31, 2016 was $2,846,200. Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” ASU 2017-01 seeks to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, intangible assets and consolidation. The adoption of ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments should be applied prospectively on or after the effective dates. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption. In March 2016, the FASB issued ASU 2016-09 “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which relates to the accounting for employee share-based payments”. ASU 2016-09 addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption. In February 2016, the FASB issued ASU 2016-02, “Leases”. ASU 2016-02 amends 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. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. ASU 2016-02 will be effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes become effective for the Company’s fiscal year beginning October 1, 2018. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements and has not determined the effects of this update on the Company’s financial position, results of operations or cash flows and disclosures at this time. In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Topic 835): Simplifying the Presentation of Debt Issuance Costs”. ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. In August 2015, the FASB issued ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” (Subtopic 835-30), which clarified that debt issuance costs related to line-of-credit arrangements may be presented as an asset and amortized over the term of the line-of-credit arrangement regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted these standards effective October 1, 2016. As a result, debt issuance costs related to debt liabilities that are not line-of-credit arrangements are included as a direct deduction from the related debt liability and those related to line-of-credit arrangements continue to be included as an asset on the accompanying Consolidated Balance Sheets. The effects of this standard were applied retrospectively to all prior periods presented. The effect of the change in accounting principle was the reduction in the amount of $6,272,143 of the Fixed Rate Mortgage Notes Payable liability and a corresponding reduction of the Financing Costs asset as of September 30, 2016 and a reclassification of Amortization of Financing Costs of $234,367 for the three months ended December 31, 2015, to Interest Expense, net of Amortization of Financing Costs in our Consolidated Statement of Income. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying Consolidated Financial Statements. Segment Reporting & Financial Information The Company’s primary business is the ownership and management of real estate properties. The Company seeks to invest in well-located, modern, single-tenant, industrial buildings leased primarily to investment grade tenants or their subsidiaries on long-term net leases. The Company reviews operating and financial information for each property on an individual basis and, therefore, each property represents an individual operating segment. The Company evaluates financial performance using Net Operating Income (“NOI”) from property operations. NOI is defined as recurring Rental and Reimbursement Revenue, less Real Estate Taxes and Operating Expenses, such as insurance, utilities and repairs and maintenance. The Company has aggregated the properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities, including the fact that they are operated as industrial properties subject to long-term net leases primarily to investment grade tenants or their subsidiaries. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | NOTE 2 – NET INCOME PER SHARE Basic Net Income per Share is calculated by dividing Net Income Attributable to Common Shareholders by the weighted-average number of common shares outstanding during the period. Diluted Net Income per Common Share is calculated by dividing Net Income Attributable to Common Shareholders by the weighted-average number of common shares outstanding plus the weighted-average number of net shares that would be issued upon exercise of stock options pursuant to the treasury stock method. In addition, common stock equivalents of 143,640 and 81,902 shares are included in the diluted weighted average shares outstanding for the three months ended December 31, 2016 and 2015, respectively. For the diluted weighted average shares outstanding for the three months ended December 31, 2016 and 2015, 215,000 and 130,000 options to purchase shares of common stock, respectively, were antidilutive. |
Real Estate Investments
Real Estate Investments | 3 Months Ended |
Dec. 31, 2016 | |
Real Estate [Abstract] | |
Real Estate Investments | NOTE 3 – REAL ESTATE INVESTMENTS Acquisitions On October 17, 2016, the Company purchased a newly constructed 338,584 square foot industrial building located in Hamburg, NY, which is in the Buffalo Metropolitan Statistical Area. The building is 100% net-leased to FedEx Ground Package System, Inc. for fifteen years through March 2031. The purchase price was $35,100,000. The Company obtained a 15 year fully-amortizing mortgage loan of $23,500,000 at a fixed interest rate of 4.03%. Annual rental revenue over the remaining term of the lease averages approximately $2,309,000. In connection with the acquisition, the Company completed its evaluation of the acquired lease. As a result of its evaluation, the Company allocated $250,000 to an Intangible Asset associated with the lease in-place. On December 30, 2016, the Company purchased a newly constructed 213,672 square foot industrial building located in Ft. Myers, FL. The building is 100% net-leased to FedEx Ground Package System, Inc. for ten years through September 2026. The purchase price was $21,001,538. The Company obtained a 15 year fully-amortizing mortgage loan of $14,500,000 at a fixed interest rate of 3.97%. Annual rental revenue over the remaining term of the lease averages approximately $1,365,000. In connection with the acquisition, the Company completed its evaluation of the acquired lease. As a result of its evaluation, the Company allocated $201,538 to an Intangible Asset associated with the lease in-place. FedEx Ground Package System, Inc.’s ultimate parent, FedEx Corporation (FDX) is a publicly-owned company and financial information related to this entity is available at the SEC’s website, www.sec.gov Expansions On October 1, 2016, a 50,625 square foot expansion of the building leased to FedEx Ground Package System, Inc. located in Edinburg, TX was completed for a cost of approximately $4,762,000, resulting in a new 10 year lease which extended the prior lease expiration date from September 2021 through September 2026. In addition, the expansion resulted in an increase in annual rent effective from the date of completion of approximately $499,000 from approximately $598,000, or $5.27 per square foot, to approximately $1,097,000, or $6.68 per square foot. Disposition On October 27, 2016, the Company sold its only vacant building consisting of a 59,425 square foot industrial building situated on 4.78 acres located in White Bear Lake, MN for net proceeds of approximately $4,126,000. Since the sale of this property does not represent a strategic shift that has (or will have) a major effect on the Company’s operations and financial results, the operations generated from this property are not included in Discontinued Operations. The following table summarizes the operations of the Company’s 59,425 square foot industrial building located in White Bear Lake, MN prior to its sale on October 27, 2016 which is included in the accompanying Consolidated Statements of Income for the three months ended December 31: Three Months Ended 12/31/2016 12/31/2015 Rental and Reimbursement Revenue $ -0- $ -0- Real Estate Taxes (8,855 ) (29,294 ) Operating Expenses (9,846 ) (15,770 ) Depreciation & Amortization (8,006 ) (24,018 ) Interest Expense -0- -0- Loss from Operations (26,707 ) (69,082 ) Loss on Sale of Real Estate Investment (95,336 ) -0- Net Loss $ (122,043 ) $ (69,082 ) Pro forma information The following unaudited pro forma condensed financial information has been prepared utilizing the historical financial statements of the Company and the effect of additional revenue and expenses generated from property acquired and expanded during fiscal 2017 and 2016, assuming that the acquisitions and completed expansions had occurred as of October 1, 2015, after giving effect to certain adjustments including (a) Rental Revenue adjustments resulting from the straight-lining of scheduled rent increases, (b) Interest Expense resulting from the assumed increase in Fixed Rate Mortgage Notes Payable and Loans Payable related to the new acquisitions, and (c) Depreciation Expense related to the new acquisitions. In addition, Net Income Attributable to Common Shareholders excludes the operating expenses incurred during fiscal 2017 and 2016 for the one vacant property, located in White Bear Lake, MN, that was sold during the quarter on October 27, 2016. Furthermore, the proceeds raised from the Dividend Reinvestment and Stock Purchase Plan (the DRIP) were used to fund property acquisitions and expansions and therefore, the weighted average shares outstanding used in calculating the Basic and Diluted Net Income per Share Attributable to Common Shareholders has been adjusted to account for the increase in shares raised through the DRIP, as if all the shares raised had occurred on October 1, 2015. The unaudited pro forma condensed financial information is not indicative of the results of operations that would have been achieved had the acquisitions and expansions reflected herein been consummated on the dates indicated or that will be achieved in the future. Three Months Ended 12/31/2016 12/31/2015 Rental Revenues $ 23,718,300 $ 23,554,500 Net Income Attributable to Common Shareholders $ 6,281,500 $ 6,091,400 Basic and Diluted Net Income per Share Attributable to Common Shareholders $ 0.09 $ 0.09 Tenant Concentration The Company has a concentration of FDX and FDX subsidiary-leased properties, consisting of fifty-five separate stand-alone leases covering approximately 8,187,000 square feet as of December 31, 2016 and forty-nine separate stand-alone leases covering approximately 6,508,000 square feet as of December 31, 2015. The percentage of FDX and its subsidiaries leased square footage to the total of the Company’s rental space was 49% (6% to FDX and 43% to FDX subsidiaries) as of December 31, 2016 and 45% (7% to FDX and 38% to FDX subsidiaries) as of December 31, 2015. As of December 31, 2016, the only tenants that leased 5% or more of the Company’s total square footage were FDX and its subsidiaries and Milwaukee Electric Tool Corporation, which leases one property consisting of approximately 862,000 square feet, which was approximately 5% of the Company’s rental space. As of December 31, 2015, no other tenant, other than FDX and its subsidiaries, accounted for 5% or more of the Company’s total rental space. Annualized Rental and Reimbursement Revenue from FDX and its subsidiaries is estimated to be approximately 59% (6% to FDX and 53% to FDX subsidiaries) of total Rental and Reimbursement Revenue for fiscal 2017 and was 55% (7% to FDX and 48% to FDX subsidiaries) of total Rental and Reimbursement Revenue for fiscal 2016. No other tenant accounted for 5% or more of the Company’s total Rental and Reimbursement Revenue for the three months ended December 31, 2016 and 2015. In addition to real estate property holdings, the Company held $74,321,496 in marketable REIT securities at December 31, 2016, representing 5.4% of the Company’s undepreciated assets (which is the Company’s total assets excluding accumulated depreciation). These liquid real estate holdings are not included in calculating the tenant concentration ratios above and therefore further enhance the Company’s diversification. The securities portfolio provides the Company with additional liquidity, diversification, income and serves as a proxy for real estate when more favorable risk adjusted returns are not available. |
Securities Available for Sale a
Securities Available for Sale at Fair Value | 3 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Securities Available for Sale at Fair Value | NOTE 4 – SECURITIES AVAILABLE FOR SALE AT FAIR VALUE The Company’s Securities Available for Sale at Fair Value consists primarily of marketable common and preferred stock of other REITs with a fair value of $74,321,496 as of December 31, 2016. The Company generally limits its investment in marketable securities to no more than approximately 10% of its undepreciated assets (which is the Company’s total assets excluding accumulated depreciation). The REIT securities portfolio provides the Company with additional liquidity, diversification, income and serves as a proxy for real estate when more favorable risk adjusted returns are not available. During the three months ended December 31, 2016, the Company sold or redeemed securities with a cost basis of $2,932,830 and recognized a Gain on Sale of Securities Transactions of $806,108. The Company also made purchases of $6,396,581 in Securities Available for Sale at Fair Value. Of this amount, the Company made total purchases of 26,967 common shares of UMH Properties, Inc. (UMH), a related REIT, for a total cost of $331,009, or a weighted average cost of $12.27 per share, of which 13,967 shares were purchased through UMH’s Dividend Reinvestment and Stock Purchase Plan. The Company owned a total of 1,016,293 UMH common shares as of December 31, 2016 at a total cost of $9,636,694 and a fair value of $15,295,216. The Company owns 200,000 shares of UMH’s 8.25% Series A Cumulative Redeemable Preferred Stock at a total cost of $5,000,000 with a fair value of $5,140,000 and the Company owns 100,000 shares of UMH’s 8.00% Series B Cumulative Redeemable Preferred Stock at a total cost of $2,500,000 with a fair value of $2,680,000. The unrealized gain on the Company’s investment in UMH’s common and preferred stock as of December 31, 2016 was $5,978,522. As of December 31, 2016, the Company had total net unrealized holding gains on its securities portfolio of $10,195,118. The Company considers many factors in determining whether a security is other than temporarily impaired, including the nature of the security and the cause, severity and duration of the impairment. The Company normally holds REIT securities long-term and has the ability and intent to hold these securities to recovery. As of December 31, 2016, the Company held one security, with a fair value of $733,500, that had an unrealized loss totaling $12,340, representing less than a 2% unrealized loss. This one security had an unrealized loss for less than twelve months. |
Debt
Debt | 3 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 5 – DEBT For the three months ended December 31, 2016 and 2015, amortization of financing costs included in interest expense was $280,913 and $234,367, respectively. The following is a summary of our Fixed Rate Mortgage Notes Payable as of December 31, 2016 and September 30, 2016: 12/31/2016 9/30/2016 Amount Weighted Average Interest Rate (1) Amount Weighted Average Interest Rate (1) Fixed Rate Mortgage Notes Payable $ 512,292,137 4.44 % $ 483,748,153 4.48 % Debt Issuance Costs $ 9,941,959 $ 9,424,697 Accumulated Amortization of Debt Issuance Costs (3,223,939 ) (3,152,554 ) Unamortized Debt Issuance Costs $ 6,718,020 $ 6,272,143 Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs $ 505,574,117 $ 477,476,010 (1) Weighted average interest rate excludes amortization of debt issuance costs. As of December 31, 2016, interest payable on these mortgages were at fixed rates ranging from 3.45% to 7.60%, with a weighted average interest rate of 4.44%. This compares to a weighted average interest rate of 4.48% as of September 30, 2016 and 4.76% as of December 31, 2015. As of December 31, 2016, the weighted average loan maturity of the Fixed Rate Mortgage Notes Payable was 10.7 years. This compares to a weighted average loan maturity of the Fixed Rate Mortgage Notes Payable of 10.5 years as of September 30, 2016 and 9.3 years as of December 31, 2015. In connection with the two properties acquired during the three months ended December 31, 2016, which are located in Hamburg (Buffalo), NY and Ft. Myers, FL (as described in Note 3), the Company entered into two, fifteen year, fully-amortizing mortgages. The two mortgages originally totaled $38,000,000 and have a weighted average interest rate of 4.01%. During the three months ended December 31, 2016, the Company fully repaid its two mortgages associated with one of its properties located in Jacksonville, FL totaling approximately $1,356,000. Subsequent to the quarter end, during January 2017, the Company fully repaid three mortgages associated with three properties located in El Paso, TX; Halfmoon, NY and Lebanon, OH totaling approximately $9,477,000. During the three months ended December 31, 2016, the Company fully repaid its two term loans payable totaling $4,768,266. One loan totaling $2,284,633 had an interest rate of 4.90% and one loan totaling $2,483,633 had a variable annual interest rate of prime plus 0.75% with a floor of 4.50%. The interest rate on the date this loan was fully repaid was 4.50%. As of December 31, 2016, total loans payable represented the amount drawn down on the Company’s $200,000,000 unsecured line of credit facility (the “Facility”), maturing in September 2020 with a one year extension at the Company’s option, (subject to various conditions as specified in the loan agreement). As of December 31, 2016, $76,000,000 was drawn down. Availability under the Facility is limited to 60% of the value of the borrowing base properties. The value of the borrowing base properties is determined by applying a 7.0% capitalization rate to the NOI generated by the Company’s unencumbered, wholly-owned industrial properties. Borrowings under the Facility, will, at the Company’s election, either i) bear interest at LIBOR plus 140 basis points to 220 basis points, depending on the Company’s leverage ratio, or ii) bear interest at BMO’s prime lending rate plus 40 basis points to 120 basis points, depending on the Company’s leverage ratio. The Company’s borrowings as of December 31, 2016, based on the Company’s leverage ratio as of December 31, 2016, bear interest at LIBOR plus 150 basis points, which was at an interest rate of 2.25% as of December 31, 2016. In addition, the Company has a $100,000,000 accordion feature, bringing the total potential availability under the Facility (subject to various conditions as specified in the loan agreement) up to $300,000,000. During the three months ended December 31, 2016, there were no additional draws on the Company’s unsecured line of credit. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Shareholders' Equity | NOTE 6 – SHAREHOLDERS’ EQUITY The Company’s authorized stock as of December 31, 2016 consisted of 196,739,750 shares of common stock, of which 70,536,720 shares were issued and outstanding, 2,300,000 shares of 7.875% Series B Cumulative Redeemable Preferred Stock, $0.01 par value per share (Series B Preferred Stock) of which all were issued and outstanding, 5,400,000 shares of 6.125% Series C Cumulative Redeemable Preferred Stock (Series C Preferred Stock), of which all were issued and outstanding, and 200,000,000 shares of Excess Stock, $0.01 par value per share, of which none were issued or outstanding. Common Stock On October 1, 2015, the Company’s Board of Directors approved a 6.7% increase in the Company’s quarterly common stock dividend, raising it to $0.16 per share from $0.15 per share. This represents an annualized dividend rate of $0.64 per share. The Company has maintained or increased its cash dividend for twenty-five consecutive years. The Company raised $20,954,643 (including dividend reinvestments of $2,077,156) from the issuance of 1,615,748 shares of common stock under its Dividend Reinvestment and Stock Purchase Plan (DRIP) during the three months ended December 31, 2016. During the three months ended December 31, 2016, the Company paid $11,184,399 in total cash dividends, or $0.16 per share, to common shareholders, of which $2,077,156 was reinvested in the DRIP. On January 17, 2017, the Company declared a dividend of $0.16 per share to be paid March 15, 2017 to common shareholders of record as of the close of business on February 15, 2017. On January 17, 2017, the Board of Directors reaffirmed its Share Repurchase Program that authorizes the Company to purchase up to $10,000,000 in the aggregate of the Company’s common stock. The Company may repurchase its shares from time to time if, in the opinion of the Board of Directors, such acquisition is advantageous to the Company. No shares were repurchased during the three months ended December 31, 2016 and, as of December 31, 2016, the Company does not own any of its own shares. 7.625% Series A Cumulative Redeemable Preferred Stock On September 14, 2016, the Company announced that it intended to redeem all 2,139,750 issued and outstanding shares of its 7.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share (7.625% Series A Preferred Stock). The Company redeemed the shares of the 7.625% Series A Preferred Stock on October 14, 2016 at a redemption price of $25.00 per share, totaling $53,493,750, plus all dividends accrued and unpaid, to and including the redemption date, in an amount equal to $0.23299 per share, totaling $498,540, for a total cash payment of $25.23299 per share, totaling $53,992,290. 7.875% Series B Cumulative Redeemable Preferred Stock During the three months ended December 31, 2016, the Company paid $1,132,032 in Preferred Dividends, or $0.4921875 per share on its outstanding Series B Preferred Stock. Dividends on the Series B Preferred Stock are cumulative and payable quarterly at an annual rate of $1.96875 per share. The Series B Preferred Stock has no maturity and will remain outstanding indefinitely unless redeemed or otherwise repurchased. Except in limited circumstances relating to the Company’s qualification as a REIT, the Series B Preferred Stock is not redeemable prior to June 7, 2017. On and after June 7, 2017, at any time and, from time to time, the Series B Preferred Stock will be redeemable in whole, or in part, at the Company’s option, at a cash redemption price of $25.00 per share, plus all accrued and unpaid dividends (whether or not declared) to the date of redemption. On January 17, 2017, the Company declared a dividend of $0.4921875 per share to be paid March 15, 2017 to Series B preferred shareholders of record as of the close of business on February 15, 2017. 6.125% Series C Cumulative Redeemable Preferred Stock During the three months ended December 31, 2016, the Company paid $1,791,564 in Preferred Dividends, or $0.3317708 per share on its outstanding Series C Preferred Stock for the period September 13, 2016 through November 30, 2016. Dividends on the Series C Preferred Stock are cumulative and payable quarterly at an annual rate of $1.53125 per share. The Series C Preferred Stock has no maturity and will remain outstanding indefinitely unless redeemed or otherwise repurchased. Except in limited circumstances relating to the Company’s qualification as a REIT, the Series C Preferred Stock is not redeemable prior to September 15, 2021. On and after September 15, 2021, at any time and, from time to time, the Series C Preferred Stock will be redeemable in whole, or in part, at the Company’s option, at a cash redemption price of $25.00 per share, plus all accrued and unpaid dividends (whether or not declared) to the date of redemption. On January 17, 2017, the Company declared a dividend of $0.3828125 per share to be paid March 15, 2017 to Series C preferred shareholders of record as of the close of business on February 15, 2017. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 7 - FAIR VALUE MEASUREMENTS The Company measures certain financial assets and liabilities at fair value on a recurring basis, including Securities Available for Sale at Fair Value. The Company’s financial assets consist mainly of marketable REIT securities. The fair value of these financial assets was determined using the following inputs at December 31, 2016 and September 30, 2016: Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of December 31, 2016: Equity Securities – Preferred Stock $ 13,583,215 $ 13,583,215 $ -0- $ -0- Equity Securities – Common Stock 60,733,016 60,733,016 -0- -0- Mortgage Backed Securities 5,265 5,265 -0- -0- Total Securities Available for Sale at Fair Value $ 74,321,496 $ 74,321,496 $ -0- $ -0- As of September 30, 2016: Equity Securities – Preferred Stock $ 13,769,073 $ 13,769,073 $ -0- $ -0- Equity Securities – Common Stock 59,830,271 59,830,271 -0- -0- Mortgage Backed Securities 5,550 5,550 -0- -0- Total Securities Available for Sale at Fair Value $ 73,604,894 $ 73,604,894 $ -0- $ -0- In addition to the Company’s investments in Securities Available for Sale at Fair Value, the Company is required to disclose certain information about fair values of its other financial instruments. Estimates of fair value are made at a specific point in time based upon, where available, relevant market prices and information about the financial instrument. Such estimates do not include any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. For a portion of the Company’s other financial instruments, no quoted market value exists. Therefore, estimates of fair value are necessarily based on a number of significant assumptions (many of which involve events outside the control of management). Such assumptions include assessments of current economic conditions, perceived risks associated with these financial instruments and their counterparties; future expected loss experience and other factors. Given the uncertainties surrounding these assumptions, the reported fair values represent estimates only, and therefore cannot be compared to the historical accounting model. The use of different assumptions or methodologies is likely to result in significantly different fair value estimates. The fair value of Cash and Cash Equivalents approximates their current carrying amounts since all such items are short-term in nature. The fair value of variable rate Loans Payable approximates their current carrying amounts, since such amounts payable are at approximately a weighted-average current market rate of interest. The estimated fair value of Fixed Rate Mortgage Notes Payable is based on discounting the future cash flows at a year-end risk adjusted borrowing rate currently available to the Company for issuance of debt with similar terms and remaining maturities. These fair value measurements fall within level 2 of the fair value hierarchy. At December 31, 2016, the Fixed Rate Mortgage Notes Payable fair value (estimated based upon expected cash outflows discounted at current market rates) amounted to approximately $510,052,000 and the carrying value amounted to $512,292,137. When the Company acquires a property, it is required to fair value all of the assets and liabilities, including intangible assets and liabilities, relating to the properties acquired lease (See Note 3). Those fair value measurements are estimated based on independent third party appraisals and fall within level 3 of the fair value hierarchy. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Dec. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | NOTE 8 - SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest during the three months ended December 31, 2016 and 2015 was approximately $5,882,000 and $5,112,000, respectively. During the three months ended December 31, 2016 and 2015, the Company had dividend reinvestments of $2,077,156 and $2,285,958, respectively, which required no cash transfers. |
Contingencies and Commitments
Contingencies and Commitments | 3 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | NOTE 9 – CONTINGENCIES AND COMMITMENTS From time to time, the Company may be subject to claims and litigation in the ordinary course of business. Management does not believe that any such claim or litigation will have a material adverse effect on the Consolidated Balance Sheets or results of operations. The Company has entered into agreements to purchase nine new build-to-suit, industrial buildings that are currently being developed in Florida, Michigan, North Carolina, Ohio, Oklahoma, South Carolina and Texas, totaling approximately 2,338,000 square feet with net-leased terms ranging from seven to fifteen years, resulting in a weighted average lease maturity of 13.5 years. The aggregate purchase price for the nine properties is approximately $250,497,000. Six of the nine purchase commitments consisting of approximately 1,694,000 square feet, or 72%, are leased to investment grade tenants or their subsidiaries. Approximately 1,397,000 square feet, or 60%, is leased to FDX and its subsidiaries. Subject to satisfactory due diligence, we anticipate closing these nine transactions during the remainder of fiscal 2017 and fiscal 2018. In connection with five of the nine properties, the Company has entered into commitments to obtain five mortgages totaling approximately $100,304,000 at fixed rates ranging from 3.60% to 4.23%, with a weighted average interest rate of 3.86%. All five of these mortgages are fifteen year, fully-amortizing loans. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10 – SUBSEQUENT EVENTS Material subsequent events have been evaluated and are disclosed herein. On January 17, 2017, the Company declared a common dividend of $0.16 per share to be paid March 15, 2017 to common shareholders of record as of the close of business on February 15, 2017. On January 17, 2017, the Company declared a dividend of $0.4921875 per share to be paid March 15, 2017 to Series B preferred shareholders of record as of the close of business on February 15, 2017. On January 17, 2017, the Company declared a dividend of $0.3828125 per share to be paid March 15, 2017 to Series C preferred shareholders of record as of the close of business on February 15, 2017. |
Organization and Accounting P17
Organization and Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of Estimates In preparing the financial statements in accordance with U.S. GAAP, management is required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods and related disclosure of contingent assets and liabilities. Actual results could differ from these estimates and assumptions. |
Reclassification | Reclassification Certain prior period amounts in the accompanying Consolidated Financial Statements have been reclassified to conform to the current period’s presentation. |
Lease Termination Income | Lease Termination Income Lease Termination Income is recognized in operating revenues when there is a signed termination agreement, all of the conditions of the agreement have been met, the tenant is no longer occupying the property and the termination consideration is probable of collection. Lease termination amounts are paid by tenants who want to terminate their lease obligations before the end of the contractual term of the lease by agreement with the Company. Of the Company’s one hundred properties, only three leases contain an early termination provision. These leases with an early termination provision are the 26,340 square foot location in Ridgeland (Jackson), MS, the 83,000 square foot location in Roanoke, VA and the 102,135 square foot location in O’Fallon (St. Louis), MO. |
Stock Compensation Plan | Stock Compensation Plan The Company has a Stock Option and Stock Award Plan, adopted in 2007 and amended and restated in 2010 (the 2007 Plan), authorizing the grant to officers and key employees of options to purchase up to 1,500,000 shares of common stock, $0.01 par value per share (common stock) including up to 100,000 shares of restricted stock awarded to any one participant in any one fiscal year. The Company accounts for awards of stock options and restricted stock in accordance with ASC 718-10, “Compensation-Stock Compensation”. ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period). The compensation cost for stock option grants is determined using option pricing models, intended to estimate the fair value of the awards at the grant date less estimated forfeitures. The compensation expense for restricted stock is recognized based on the fair value of the restricted stock awards less estimated forfeitures. The fair value of restricted stock awards is equal to the fair value of the Company’s stock on the grant date. The amortization of compensation costs for stock option grants and restricted stock are included in General and Administrative Expenses in the accompanying Consolidated Statements of Income and amounted to $100,155 and $104,961 for the three months ended December 31, 2016 and 2015, respectively. During the three months ended December 31, 2015, no stock options were granted under the Company’s 2007 Plan. During the three months ended December 31, 2016, the following stock options, which vest one year after grant date, were granted under the Company’s 2007 Plan: Date of Grant Number of Employees Number of Shares Option Price Expiration Date 12/9/16 10 215,000 $ 14.24 12/9/24 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used for grants in the fiscal year indicated: Fiscal 2017 Dividend yield 4.49 % Expected volatility 18.88 % Risk-free interest rate 2.26 % Expected lives (years) 8 Estimated forfeitures -0- The fair value of options granted during the three months ended December 31, 2016 was $1.45 per option. During the three months ended December 31, 2016 and 2015, no shares of restricted stock were granted under the Company’s 2007 Plan. During the three months ended December 31, 2015, four participants exercised options to purchase an aggregate of 115,000 shares of common stock at a weighted average exercise price of $8.04 per share for total proceeds of $924,300. During the three months ended December 31, 2016, no options were exercised. As of December 31, 2016, a total of 229,878 shares were available to grant as stock options or as restricted stock and there were outstanding options to purchase 670,000 shares under the 2007 Plan. The aggregate intrinsic value of options outstanding as of December 31, 2016 was $2,846,200. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” ASU 2017-01 seeks to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, intangible assets and consolidation. The adoption of ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments should be applied prospectively on or after the effective dates. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption. In March 2016, the FASB issued ASU 2016-09 “Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which relates to the accounting for employee share-based payments”. ASU 2016-09 addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption. In February 2016, the FASB issued ASU 2016-02, “Leases”. ASU 2016-02 amends 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. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. ASU 2016-02 will be effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements and the timing of adoption. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These changes become effective for the Company’s fiscal year beginning October 1, 2018. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements and has not determined the effects of this update on the Company’s financial position, results of operations or cash flows and disclosures at this time. In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Topic 835): Simplifying the Presentation of Debt Issuance Costs”. ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. In August 2015, the FASB issued ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” (Subtopic 835-30), which clarified that debt issuance costs related to line-of-credit arrangements may be presented as an asset and amortized over the term of the line-of-credit arrangement regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted these standards effective October 1, 2016. As a result, debt issuance costs related to debt liabilities that are not line-of-credit arrangements are included as a direct deduction from the related debt liability and those related to line-of-credit arrangements continue to be included as an asset on the accompanying Consolidated Balance Sheets. The effects of this standard were applied retrospectively to all prior periods presented. The effect of the change in accounting principle was the reduction in the amount of $6,272,143 of the Fixed Rate Mortgage Notes Payable liability and a corresponding reduction of the Financing Costs asset as of September 30, 2016 and a reclassification of Amortization of Financing Costs of $234,367 for the three months ended December 31, 2015, to Interest Expense, net of Amortization of Financing Costs in our Consolidated Statement of Income. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying Consolidated Financial Statements. |
Segment Reporting & Financial Information | Segment Reporting & Financial Information The Company’s primary business is the ownership and management of real estate properties. The Company seeks to invest in well-located, modern, single-tenant, industrial buildings leased primarily to investment grade tenants or their subsidiaries on long-term net leases. The Company reviews operating and financial information for each property on an individual basis and, therefore, each property represents an individual operating segment. The Company evaluates financial performance using Net Operating Income (“NOI”) from property operations. NOI is defined as recurring Rental and Reimbursement Revenue, less Real Estate Taxes and Operating Expenses, such as insurance, utilities and repairs and maintenance. The Company has aggregated the properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities, including the fact that they are operated as industrial properties subject to long-term net leases primarily to investment grade tenants or their subsidiaries. |
Organization and Accounting P18
Organization and Accounting Policies (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Organization And Accounting Policies Tables | |
Summary of Stock Options Outstanding | During the three months ended December 31, 2016, the following stock options, which vest one year after grant date, were granted under the Company’s 2007 Plan: Date of Grant Number of Employees Number of Shares Option Price Expiration Date 12/9/16 10 215,000 $ 14.24 12/9/24 |
Schedule of Stock Options, Valuation Assumptions | The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used for grants in the fiscal year indicated: Fiscal 2017 Dividend yield 4.49 % Expected volatility 18.88 % Risk-free interest rate 2.26 % Expected lives (years) 8 Estimated forfeitures -0- |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Real Estate [Abstract] | |
Summary of Income or Operation Statements | Three Months Ended 12/31/2016 12/31/2015 Rental and Reimbursement Revenue $ -0- $ -0- Real Estate Taxes (8,855 ) (29,294 ) Operating Expenses (9,846 ) (15,770 ) Depreciation & Amortization (8,006 ) (24,018 ) Interest Expense -0- -0- Loss from Operations (26,707 ) (69,082 ) Loss on Sale of Real Estate Investment (95,336 ) -0- Net Loss $ (122,043 ) $ (69,082 ) |
Schedule of Pro Forma Information | The unaudited pro forma condensed financial information is not indicative of the results of operations that would have been achieved had the acquisitions and expansions reflected herein been consummated on the dates indicated or that will be achieved in the future. Three Months Ended 12/31/2016 12/31/2015 Rental Revenues $ 23,718,300 $ 23,554,500 Net Income Attributable to Common Shareholders $ 6,281,500 $ 6,091,400 Basic and Diluted Net Income per Share Attributable to Common Shareholders $ 0.09 $ 0.09 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Fixed Rate Mortgage Notes Payable | The following is a summary of our Fixed Rate Mortgage Notes Payable as of December 31, 2016 and September 30, 2016: 12/31/2016 9/30/2016 Amount Weighted Average Interest Rate (1) Amount Weighted Average Interest Rate (1) Fixed Rate Mortgage Notes Payable $ 512,292,137 4.44 % $ 483,748,153 4.48 % Debt Issuance Costs $ 9,941,959 $ 9,424,697 Accumulated Amortization of Debt Issuance Costs (3,223,939 ) (3,152,554 ) Unamortized Debt Issuance Costs $ 6,718,020 $ 6,272,143 Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs $ 505,574,117 $ 477,476,010 (1) Weighted average interest rate excludes amortization of debt issuance costs. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Financial Assets | The fair value of these financial assets was determined using the following inputs at December 31, 2016 and September 30, 2016: Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of December 31, 2016: Equity Securities – Preferred Stock $ 13,583,215 $ 13,583,215 $ -0- $ -0- Equity Securities – Common Stock 60,733,016 60,733,016 -0- -0- Mortgage Backed Securities 5,265 5,265 -0- -0- Total Securities Available for Sale at Fair Value $ 74,321,496 $ 74,321,496 $ -0- $ -0- As of September 30, 2016: Equity Securities – Preferred Stock $ 13,769,073 $ 13,769,073 $ -0- $ -0- Equity Securities – Common Stock 59,830,271 59,830,271 -0- -0- Mortgage Backed Securities 5,550 5,550 -0- -0- Total Securities Available for Sale at Fair Value $ 73,604,894 $ 73,604,894 $ -0- $ -0- |
Organization and Accounting P22
Organization and Accounting Policies (Details Narrative) | 3 Months Ended | ||
Dec. 31, 2016USD ($)ft²Properties$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Sep. 30, 2016USD ($)ft²Properties$ / shares | |
Number of real estate properties owned | Properties | 100 | 99 | |
Total square foot of property | ft² | 16,554,000 | 16,010,000 | |
Occupancy percentage | 100.00% | 99.60% | |
REIT investment securities, description | The Company also owns a portfolio of REIT investment securities which the Company generally limits to no more than approximately 10% of its undepreciated assets., (which is the Companys total assets excluding accumulated depreciation). | ||
Lease termination income description | Companys one hundred properties, only three leases contain an early termination provision. These leases with an early termination provision are the 26,340 square foot location in Ridgeland (Jackson), MS, the 83,000 square foot location in Roanoke, VA and the 102,135 square foot location in OFallon (St. Louis), MO. | ||
Common stock par value | $ / shares | $ 0.01 | $ 0.01 | |
Stock based compensation expense | $ | $ 100,155 | $ 104,961 | |
Fair value of options granted per option | $ / shares | $ 1.45 | ||
Accounting Standards Update 2015-03 [Member] | |||
Fixed rate mortgage note payable liability | $ | $ 6,272,143 | ||
Reclassification of amortization of financing costs | $ | $ 234,367 | ||
2007 Plan [Member] | |||
Exercised options to purchase of common stock shares | 115,000 | ||
Weighted average exercise price | $ / shares | $ 8.04 | ||
Proceeds from stock options exercised | $ | $ 924,300 | ||
Shares were available to grant as stock options or as restricted stock | 229,878 | ||
Outstanding options to purchase of common stock | 670,000 | ||
Aggregate intrinsic value of options outstanding | $ | $ 2,846,200 | ||
Common Stock [Member] | 2007 Plan [Member] | Maximum [Member] | |||
Options to purchase of common stock, shares | 1,500,000 | ||
Common stock par value | $ / shares | $ 0.01 | ||
Restricted Stock Units (RSUs) [Member] | 2007 Plan [Member] | Maximum [Member] | |||
Options to purchase of common stock, shares | 100,000 | ||
Common stock par value | $ / shares | $ 0.01 | ||
Restricted Stock [Member] | 2007 Plan [Member] | |||
Number of stock shares granted during period | 0 | 0 | |
Ridgeland (Jackson), MS [Member] | |||
Total square foot of property | ft² | 26,340 | ||
Roanoke, VA [Member] | |||
Total square foot of property | ft² | 83,000 | ||
O'Fallon (St. Louis) MO [Member] | |||
Total square foot of property | ft² | 102,135 |
Organization and Accounting P23
Organization and Accounting Policies - Summary of Stock Options Outstanding (Details) - Stock Option [Member] | 3 Months Ended |
Dec. 31, 2016Employee$ / sharesshares | |
Date of Grant | Dec. 9, 2016 |
Number of Employees | Employee | 10 |
Number of Shares | shares | 215,000 |
Option Price | $ / shares | $ 14.24 |
Expiration Date | Dec. 9, 2024 |
Organization and Accounting P24
Organization and Accounting Policies - Schedule of Stock Options, Valuation Assumptions (Details) | 3 Months Ended |
Dec. 31, 2016shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Dividend yield | 4.49% |
Expected volatility | 18.88% |
Risk-free interest rate | 2.26% |
Expected lives (years) | 8 years |
Estimated forfeitures | 0 |
Net Income Per Share (Details N
Net Income Per Share (Details Narrative) - shares | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Common stock equivalents included in the diluted weighted average shares outstanding | 143,640 | 81,902 |
Antidilutive securities | 215,000 | 130,000 |
Real Estate Investments (Detail
Real Estate Investments (Details Narrative) | Dec. 30, 2016USD ($)ft² | Oct. 27, 2016USD ($)ft²a | Oct. 17, 2016USD ($)ft² | Oct. 03, 2016USD ($)ft²$ / shares | Dec. 31, 2016USD ($)ft²a | Dec. 31, 2015a |
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Held marketable securities | $ 74,321,496 | |||||
Percentage of un depreciated assets | 5.40% | |||||
Fedex Ground Package System Inc. [Member] | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Lease term | 10 years | |||||
Expansion square feet | ft² | 50,625 | |||||
Cost of building expansion | $ 4,762,000 | |||||
Lease expiration date description | Prior lease expiration date from September 2021 through September 2026. | |||||
Increase in rent | $ 499,000 | |||||
Rent prior to expansion | $ 598,000 | |||||
Rent prior to expansion, per square foot | $ / shares | $ 5.27 | |||||
Rent increase to after expansion | $ 1,097,000 | |||||
Rent increase to after expansion, per square foot | $ / shares | $ 6.68 | |||||
Fedex And Fedex Subsidiaries [Member] | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Square feet of real estate property leased | a | 8,187,000 | 6,508,000 | ||||
Percentage of real estate property leased | 49.00% | 45.00% | ||||
Percentage of rental space and tenant account, description | No other tenant accounted for 5% or more of the Companys total rental space | |||||
Fedex And Fedex Subsidiaries [Member] | Rental And Reimbursement Revenue [Member] | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Percentage of rental space and tenant account, description | No other tenant accounted for 5% or more of the Company's total Rental and Reimbursement Revenue. | |||||
Fedex And Fedex Subsidiaries [Member] | Rental And Reimbursement Revenue [Member] | Fiscal 2017 [Member] | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Percentage of aggregate rental and reimbursement revenue | 59.00% | 55.00% | ||||
Fedex Corporation [Member] | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Percentage of real estate property leased | 6.00% | 7.00% | ||||
Fedex Corporation [Member] | Rental And Reimbursement Revenue [Member] | Fiscal 2017 [Member] | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Percentage of aggregate rental and reimbursement revenue | 6.00% | 7.00% | ||||
Fedex Corporation Subsidiaries [Member] | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Percentage of real estate property leased | 43.00% | 38.00% | ||||
Fedex Corporation Subsidiaries [Member] | Rental And Reimbursement Revenue [Member] | Fiscal 2017 [Member] | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Percentage of aggregate rental and reimbursement revenue | 53.00% | 48.00% | ||||
Milwaukee Electric Tool [Member] | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Total property (square foot) | ft² | 862,000 | |||||
Industrial Building [Member] | Fedex Ground Package System Inc. [Member] | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Purchase of industrial building (square foot) | ft² | 213,672 | 338,584 | ||||
Percentage of building area leased | 100.00% | 100.00% | ||||
Lease term | 10 years | 15 years | ||||
Lease term expiration period | Sep. 30, 2026 | Mar. 31, 2031 | ||||
Purchase price of industrial building | $ 21,001,538 | $ 35,100,000 | ||||
Mortgage loan amortization period | 15 years | 15 years | ||||
Face amount of mortgages | $ 14,500,000 | $ 23,500,000 | ||||
Mortgage loans on real estate, interest rate | 3.97% | 4.03% | ||||
Annual rental income over the remaining term of lease | $ 1,365,000 | $ 2,309,000 | ||||
Allocated to intangible assets | $ 201,538 | $ 250,000 | ||||
Industrial Building [Member] | White Bear Lake, MN [Member] | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Sale of industrial building (square foot) | ft² | 59,425 | |||||
Area of property | a | 4.78 | |||||
Net proceeds from sale of property | $ 4,126,000 |
Real Estate Investments - Sched
Real Estate Investments - Schedule of Real Estate Investments (Details) - White Bear Lake, MN [Member] - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Rental and Reimbursement Revenue | $ 0 | $ 0 |
Real Estate Taxes | (8,855) | (29,294) |
Operating Expenses | (9,846) | (15,770) |
Depreciation & Amortization | (8,006) | (24,018) |
Interest Expense | 0 | 0 |
Loss from Operations | (26,707) | (69,082) |
Loss on Sale of Real Estate Investment | (95,336) | 0 |
Net Loss | $ (122,043) | $ (69,082) |
Real Estate Investments - Sch28
Real Estate Investments - Schedule of Pro Forma Information (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Real Estate [Abstract] | ||
Rental Revenues | $ 23,718,300 | $ 23,554,500 |
Net Income Attributable to Common Shareholders | $ 6,281,500 | $ 6,091,400 |
Basic and Diluted Net Income per Share Attributable to Common Shareholders | $ 0.09 | $ 0.09 |
Securities Available for Sale29
Securities Available for Sale at Fair Value (Details Narrative) - USD ($) | 3 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Securities available for sale at fair value | $ 74,321,496 | $ 73,604,894 | |
Security available for sale, maximum percentage of investment on un depreciated assets | 10.00% | ||
Proceeds from sales or redemptions of securities available for sale | $ 2,932,830 | ||
Gain on sale of securities available for sale | 806,108 | $ 8,380 | |
Purchase of securities available for sale | $ 6,396,581 | $ 6,491,654 | |
Number of shares purchased through UMH’s dividend reinvestment | 13,967 | ||
Net unrealized gains on securities portfolio | $ 10,195,118 | $ 12,942,267 | |
One Security [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Securities available for sale at fair value | 733,500 | ||
Unrealized loss on securities portfolio | $ 12,340 | ||
Percentage of unrealized loss | 2.00% | ||
UMH Properties, Inc [Member] | Series A Cumulative Redeemable Preferred Stock [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Securities available for sale at fair value | $ 5,140,000 | ||
Shares owned, cost | $ 5,000,000 | ||
Available for sale securities, shares | 200,000 | ||
Dividend rate of preferred stock held as security for loan | 8.25% | ||
UMH Properties, Inc [Member] | Series B Cumulative Redeemable Preferred Stock [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Securities available for sale at fair value | $ 2,680,000 | ||
Shares owned, cost | $ 2,500,000 | ||
Available for sale securities, shares | 100,000 | ||
Dividend rate of preferred stock held as security for loan | 8.00% | ||
UMH Properties, Inc [Member] | Common and Preferred Stock [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Net unrealized gains on securities portfolio | $ 5,978,522 | ||
UMH Properties, Inc [Member] | Common Stock [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Securities available for sale at fair value | $ 15,295,216 | ||
UMH common shares purchased during the quarter | 26,967 | ||
Cost of securities purchased | $ 331,009 | ||
Weighted average cost per share | $ 12.27 | ||
Shares owned by company | 1,016,293 | ||
Shares owned, cost | $ 9,636,694 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | |
Interest expense | $ 280,913 | $ 234,367 | |
Weighted average interest rate percentage | 4.44% | 4.76% | 4.48% |
Notes payable maturity period | 10 years 8 months 12 days | 9 years 3 months 18 days | 10 years 6 months |
Proceeds from fixed rate mortgage notes payable | $ 38,000,000 | $ 33,670,000 | |
Line of Credit [Member] | |||
Total availability of unsecured credit facility | $ 200,000,000 | ||
Debt maturity date | Sep. 30, 2020 | ||
Line of credit facility drawn down | $ 76,000,000 | ||
Line of credit facility interest rate terms | Availability under the Facility is limited to 60% of the value of the borrowing base properties. The value of the borrowing base properties is determined by applying a 7.0% capitalization rate to the NOI generated by the Companys unencumbered, wholly-owned industrial properties. Borrowings under the Facility, will, at the Companys election, either i) bear interest at LIBOR plus 140 basis points to 220 basis points, depending on the Companys leverage ratio, or ii) bear interest at BMOs prime lending rate plus 40 basis points to 120 basis points, depending on the Companys leverage ratio. The Companys borrowings as of December 31, 2016, based on the Companys leverage ratio as of December 31, 2016, bear interest at LIBOR plus 150 basis points, which was at an interest rate of 2.25% as of December 31, 2016. | ||
Line of credit facility related to accordion feature | $ 100,000,000 | ||
Total potential available under unsecured line of credit | $ 300,000,000 | ||
Term Loans [Member] | |||
Annual interest rate | 4.50% | ||
Repayment of loans payable | $ 4,768,266 | ||
Term Loan One [Member] | |||
Annual interest rate | 4.90% | ||
Repayment of loans payable | $ 2,284,633 | ||
Term Loan Two [Member] | |||
Annual interest rate | 4.50% | ||
Repayment of loans payable | $ 2,483,633 | ||
Annual interest variable rate basis | prime plus 0.75% | ||
Two Mortgages [Member] | |||
Weighted average interest rate percentage | 4.01% | ||
Proceeds from fixed rate mortgage notes payable | $ 38,000,000 | ||
Repayment of mortgage payable | 1,356,000 | ||
Three Mortgages [Member] | January 2017 [Member] | |||
Repayment of mortgage payable | $ 9,477,000 | ||
Minimum [Member] | |||
Annual interest rate | 3.45% | ||
Maximum [Member] | |||
Annual interest rate | 7.60% |
Debt - Schedule of Fixed Rate M
Debt - Schedule of Fixed Rate Mortgage Notes Payable (Details) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |||
Fixed Rate Mortgage Notes Payable | $ 512,292,137 | $ 483,748,153 | |
Debt Issuance Costs | 9,941,959 | 9,424,697 | |
Accumulated Amortization of Debt Issuance Costs | (3,223,939) | (3,152,554) | |
Unamortized Debt Issuance Costs | 6,718,020 | 6,272,143 | |
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs | $ 505,574,117 | $ 477,476,010 | |
Weighted Average Interest Rate | [1] | 4.44% | 4.48% |
[1] | Weighted average interest rate excludes amortization of debt issuance costs. |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) | Oct. 14, 2016 | Oct. 02, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | Sep. 14, 2016 |
Subsidiary or Equity Method Investee [Line Items] | ||||||
Common stock, shares authorized | 196,739,750 | 194,600,000 | ||||
Common stock, shares issued | 70,536,720 | 68,920,972 | ||||
Common stock, shares outstanding | 70,536,720 | 68,920,972 | ||||
Excess stock, shares authorized | 200,000,000 | 200,000,000 | ||||
Excess Stock, par value | $ 0.01 | $ 0.01 | ||||
Excess Stock , shares issued | ||||||
Excess Stock , shares outstanding | ||||||
Cash raised from issuance of common stock under DRIP | $ 18,877,487 | $ 12,575,537 | ||||
Amount of dividend reinvested | $ 2,077,156 | $ 2,285,958 | ||||
Common Stock [Member] | ||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||
Declaration date | Jan. 17, 2017 | |||||
Dividends payable, date to be paid | Mar. 15, 2017 | |||||
Record date | Feb. 15, 2017 | |||||
Dividend Reinvestment and Stock Purchase Plan [Member] | ||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||
Common stock issued under plan | 1,615,748 | |||||
Maximum [Member] | January 17, 2017 [Member] | ||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||
Share Repurchase Program authorizes amount | $ 10,000,000 | |||||
Common Stock [Member] | ||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||
Percentage increase in common stock dividend | 6.70% | |||||
Common stock dividend, description | Board of Directors approved a 6.7% increase in the Companys quarterly common stock dividend, raising it to $0.16 per share from $0.15 per share. | |||||
Annualized dividend rate per share price | $ 0.64 | |||||
Cash raised from issuance of common stock under DRIP | $ 20,954,643 | |||||
Amount of dividend reinvested | 2,077,156 | |||||
Cash dividends paid | $ 11,184,399 | |||||
Dividend declared per share | $ 0.16 | |||||
Common Stock [Member] | Minimum [Member] | ||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||
Dividend per common stock | 0.15 | |||||
Common Stock [Member] | Maximum [Member] | ||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||
Dividend per common stock | $ 0.16 | |||||
Series B Preferred Stock [Member] | ||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||
Preferred stock, shares authorized | 2,300,000 | 2,300,000 | ||||
Cumulative redeemable preferred, stock dividend rate | 7.875% | 7.875% | ||||
Preferred stock, par value | $ 0.01 | $ 0.01 | ||||
Preferred stock, shares issued | 2,300,000 | 2,300,000 | ||||
Preferred stock, shares outstanding | 2,300,000 | 2,300,000 | ||||
Series C Preferred Stock [Member] | ||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||
Preferred stock, shares authorized | 5,400,000 | 5,400,000 | ||||
Cumulative redeemable preferred, stock dividend rate | 6.125% | 6.125% | ||||
Preferred stock, par value | $ 0.01 | $ 0.01 | ||||
Preferred stock, shares issued | 5,400,000 | 5,400,000 | ||||
Preferred stock, shares outstanding | 5,400,000 | 5,400,000 | ||||
Series A Cumulative Redeemable Preferred Stock [Member] | ||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||
Cumulative redeemable preferred, stock dividend rate | 7.625% | 7.625% | ||||
Preferred stock, par value | $ 0.01 | |||||
Preferred stock, shares issued | 2,139,750 | |||||
Preferred stock, shares outstanding | 2,139,750 | |||||
Cash dividends paid | $ 53,992,290 | |||||
Preferred stock redemption price | $ 25 | |||||
Dividend payable | $ 53,493,750 | |||||
Net accrued dividend paid at redemption | $ 498,540 | |||||
Dividend per preferred stock | $ 25.23299 | |||||
Preferred stock accrued dividend per share | $ 0.23299 | |||||
Series B Cumulative Redeemable Preferred Stock [Member] | ||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||
Cumulative redeemable preferred, stock dividend rate | 7.875% | |||||
Cash dividends paid | $ 1,132,032 | |||||
Dividend declared per share | $ 0.4921875 | |||||
Declaration date | Jan. 17, 2017 | |||||
Dividends payable, date to be paid | Mar. 15, 2017 | |||||
Record date | Feb. 15, 2017 | |||||
Preferred stock redemption price | $ 25 | |||||
Annual rate of dividends cumulative and payable | $ 1.96875 | |||||
Series C Cumulative Redeemable Preferred Stock [Member] | ||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||
Cumulative redeemable preferred, stock dividend rate | 6.125% | |||||
Cash dividends paid | $ 1,791,564 | |||||
Dividend declared per share | $ 0.3828125 | |||||
Dividend paid per share | $ 0.3317708 | |||||
Declaration date | Jan. 17, 2017 | |||||
Dividends payable, date to be paid | Mar. 15, 2017 | |||||
Record date | Feb. 15, 2017 | |||||
Preferred stock redemption price | $ 25 | |||||
Annual rate of dividends cumulative and payable | $ 1.53125 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Narrative) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 |
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs | $ 505,574,117 | $ 477,476,010 |
Mortgage Notes Payable Fair Value [Member] | ||
Fixed rate mortgage notes payable at fair value | 510,052,000 | |
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs | $ 512,292,137 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Securities Available for Sale at Fair Value (Details) - USD ($) | Dec. 31, 2016 | Sep. 30, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | $ 74,321,496 | $ 73,604,894 |
Fair Value Measurements [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | 74,321,496 | 73,604,894 |
Fair Value Measurements [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | 0 | 0 |
Fair Value Measurements [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | 0 | 0 |
Fair Value Measurements [Member] | Preferred Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | 13,583,215 | 13,769,073 |
Fair Value Measurements [Member] | Preferred Stock [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | 13,583,215 | 13,769,073 |
Fair Value Measurements [Member] | Preferred Stock [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | 0 | 0 |
Fair Value Measurements [Member] | Preferred Stock [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | 0 | 0 |
Fair Value Measurements [Member] | Common Stock [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | 60,733,016 | 59,830,271 |
Fair Value Measurements [Member] | Common Stock [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | 60,733,016 | 59,830,271 |
Fair Value Measurements [Member] | Common Stock [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | 0 | 0 |
Fair Value Measurements [Member] | Common Stock [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | 0 | 0 |
Fair Value Measurements [Member] | Mortgage Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | 5,265 | 5,550 |
Fair Value Measurements [Member] | Mortgage Backed Securities [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | 5,265 | 5,550 |
Fair Value Measurements [Member] | Mortgage Backed Securities [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | 0 | 0 |
Fair Value Measurements [Member] | Mortgage Backed Securities [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities Available for Sale at Fair Value | $ 0 | $ 0 |
Supplemental Cash Flow Inform35
Supplemental Cash Flow Information (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash paid for interest | $ 5,882,000 | $ 5,112,000 |
Amount of dividend reinvested | $ 2,077,156 | $ 2,285,958 |
Contingencies and Commitments (
Contingencies and Commitments (Details Narrative) - Industrial Building [Member] | 3 Months Ended |
Dec. 31, 2016USD ($)ft²RealEstateProperties | |
Contingencies and Commitments [Line Items] | |
Number of real estate properties committed to purchase | 9 |
Number of real estate properties committed to mortgage | 5 |
Mortgage Loans committed on real estate, carrying amount of mortgage | $ | $ 100,304,000 |
Mortgages, minimum interest rate | 3.60% |
Mortgages, maximum interest rate | 4.23% |
Mortgage loans weighted average interest rate | 3.86% |
Mortgage loans amortization period | 15 years |
Property Purchase Agreement [Member] | |
Contingencies and Commitments [Line Items] | |
Area of buildings (in square foot) | ft² | 2,338,000 |
Weighted average lease maturity term | 13.5 Years |
Number of real estate properties committed to purchase | 9 |
Aggregate purchase price of industrial properties | $ | $ 250,497,000 |
Property Purchase Agreement [Member] | Investment Grade Tenants Or Subsidiaries [Member] | |
Contingencies and Commitments [Line Items] | |
Number of real estate properties committed to purchase | 6 |
Percentage of building area leased | 72.00% |
Area leased to FDX | ft² | 1,694,000 |
Property Purchase Agreement [Member] | FDX and Subsidiaries [Member] | |
Contingencies and Commitments [Line Items] | |
Percentage of building area leased | 60.00% |
Area leased to FDX | ft² | 1,397,000 |
Property Purchase Agreement [Member] | Minimum [Member] | |
Contingencies and Commitments [Line Items] | |
Weighted average lease maturity term | 7 Years |
Property Purchase Agreement [Member] | Maximum [Member] | |
Contingencies and Commitments [Line Items] | |
Weighted average lease maturity term | 15 Years |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | Jan. 17, 2017$ / shares |
Common Shareholders [Member ] | |
Subsequent Event [Line Items] | |
Dividend declared per share | $ 0.16 |
Dividend declaration date | Jan. 17, 2017 |
Dividends payable, date to be paid | Mar. 15, 2017 |
Dividend payable date of record | Feb. 15, 2017 |
Series B Preferred Shareholders [Member] | |
Subsequent Event [Line Items] | |
Dividend declared per share | $ 0.4921875 |
Dividend declaration date | Jan. 17, 2017 |
Dividends payable, date to be paid | Mar. 15, 2017 |
Dividend payable date of record | Feb. 15, 2017 |
Series C Preferred Shareholders [Member] | |
Subsequent Event [Line Items] | |
Dividend declared per share | $ 0.3828125 |
Dividend declaration date | Jan. 17, 2017 |
Dividends payable, date to be paid | Mar. 15, 2017 |
Dividend payable date of record | Feb. 15, 2017 |