Monmouth Real Estate Investment (MNR-PC) 8-K Results of Operations and Financial Condition

Table of Contents

	Page
Consolidated Balance Sheets	3
Consolidated Statements of Income	4
Net Income, FFO, Core FFO, AFFO, EBITDAre, Adjusted EBITDA	5
NOI Reconciliations	6
Financial Highlights	7
Same Property Statistics	8
Consolidated Statements of Cash Flows	10
Capital Structure and Leverage Ratios	11
Debt Maturity	13
Securities Portfolio Historic Performance	14
Property Table by Tenant	16
Property Table by State	17
Lease Expirations	18
Recent Acquisitions	19
Property Table	20
Definitions	23
Press Release Dated November 28, 2018	24

The statement of operations and supplemental statement of operations provided in this supplemental information package present funds from operations (FFO), core funds from operations (Core FFO), adjusted funds from operations (AFFO), net operating income (NOI), EBITDAre and Adjusted EBITDA, which are REIT industry financial measures that are not calculated in accordance with accounting principles generally accepted in the United States. Please see page 23 for a definition of these supplemental performance measures. Please see the supplemental statement of operations reconciliation for a reconciliation of certain captions in the supplemental statement of operations reported in this supplemental information package to the statement of operations as reported in the Company’s filings with the SEC on Form 10-K.

Consolidated Balance Sheets

	As of			As of
	September 30, 2018			September 30, 2017
ASSETS
Real Estate Investments:
Land	$	224,719,083		$	187,224,819
Buildings and Improvements		1,494,859,336			1,244,691,715
Total Real Estate Investments		1,719,578,419			1,431,916,534
Accumulated Depreciation		(207,065,634	)		(171,086,083	)
Real Estate Investments		1,512,512,785			1,260,830,451
Real Estate Held for Sale		-0-			14,631,633
Cash and Cash Equivalents		9,324,585			10,226,046
Securities Available for Sale at Fair Value		154,920,545			123,764,770
Tenant and Other Receivables		1,249,434			1,753,054
Deferred Rent Receivable		9,656,179			8,049,275
Prepaid Expenses		6,189,796			5,434,874
Intangible Assets, net of Accumulated Amortization of $13,699,519 and $13,404,318, respectively		14,589,756			10,010,165
Capitalized Lease Costs, net of Accumulated Amortization of $3,271,481 and $3,393,187, respectively		5,231,845			4,180,907
Financing Costs, net of Accumulated Amortization of $995,135 and $619,555, respectively		500,129			875,709
Other Assets		4,202,832			3,280,871
TOTAL ASSETS	$	1,718,377,886		$	1,443,037,755
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs	$	711,545,649		$	591,364,371
Loans Payable		186,608,676			120,091,417
Accounts Payable and Accrued Expenses		5,891,172			4,450,753
Other Liabilities		16,426,622			14,265,518
Total Liabilities		920,472,119			730,172,059
COMMITMENTS AND CONTINGENCIES
Shareholders’ Equity:
6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 Par Value Per Share: 16,400,000 and 12,400,000 Shares Authorized as of September 30, 2018 and 2017, respectively; 11,488,001 and 9,839,445 Shares Issued and Outstanding as of September 30, 2018 and 2017, respectively		287,200,025			245,986,125
Common Stock, $0.01 Par Value Per Share: 188,039,750 and 192,039,750 Shares Authorized as of September 30, 2018 and 2017, respectively; 81,503,134 and 75,630,521 Shares Issued and Outstanding as of September 30, 2018 and 2017, respectively		815,031			756,305
Excess Stock, $0.01 Par Value Per Share: 200,000,000 Shares Authorized as of September 30, 2018 and 2017; No Shares Issued or Outstanding as of September 30, 2018 and 2017		-0-			-0-
Additional Paid-In Capital		534,635,290			459,552,701
Accumulated Other Comprehensive Income (Loss)		(24,744,579	)		6,570,565
Undistributed Income		-0-			-0-
Total Shareholders’ Equity		797,905,767			712,865,696
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY	$	1,718,377,886		$	1,443,037,755

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  3 

Consolidated Statements of Income

	For The						For The
	Three Months Ended						Twelve Months Ended
	9/30/2018			9/30/2017			9/30/2018			9/30/2017
INCOME:
Rental Revenue	$	30,305,505		$	26,367,855		$	115,864,119		$	97,659,778
Reimbursement Revenue		6,295,189			4,789,059			23,297,730			18,725,527
Lease Termination Income		-0-			-0-			210,261			-0-
TOTAL INCOME		36,600,694			31,156,914			139,372,110			116,385,305
EXPENSES:
Real Estate Taxes		5,003,666			3,857,976			18,596,239			15,266,634
Operating Expenses		1,422,724			1,251,936			5,793,878			4,887,922
General & Administrative Expenses		2,723,788			2,501,693			8,776,579			7,809,546
Acquisition Costs		-0-			-0-			-0-			178,526
Depreciation		9,671,314			8,185,168			36,175,923			29,634,998
Amortization of Capitalized Lease Costs and Intangible Assets		650,484			497,375			2,391,104			1,824,751
TOTAL EXPENSES		19,471,976			16,294,148			71,733,723			59,602,377
OTHER INCOME (EXPENSE):
Dividend and Interest Income		3,740,054			2,299,911			13,120,465			6,930,564
Gain on Sale of Securities Transactions		-0-			17,770			111,387			2,311,714
Interest Expense, including Amortization of Financing Costs		(8,709,149	)		(6,918,257	)		(32,349,705	)		(25,754,121	)
TOTAL OTHER INCOME (EXPENSE)		(4,969,095	)		(4,600,576	)		(19,117,853	)		(16,511,843	)
INCOME FROM CONTINUING OPERATIONS		12,159,623			10,262,190			48,520,534			40,271,085
Gain on Sale of Real Estate Investments		-0-			-0-			7,485,266			-0-
NET INCOME		12,159,623			10,262,190			56,005,800			40,271,085
Less: Preferred Dividends		4,377,262			3,536,103			17,190,456			14,861,686
Less: Redemption of Preferred Stock		-0-			-0-			-0-			2,467,165
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	7,782,361		$	6,726,087		$	38,815,344		$	22,942,234

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  4 

Net Income, FFO, Core FFO, AFFO, EBITDAre, Adjusted EBITDA

(unaudited)

	For The						For The
	Three Months Ended						Twelve Months Ended
FFO, Core FFO, AFFO	9/30/2018			9/30/2017			9/30/2018			9/30/2017
Net Income Attributable to Common Shareholders	$	7,782,361		$	6,726,087		$	38,815,344		$	22,942,234
Plus: Depreciation Expense (excluding Corporate Office Capitalized Costs)		9,631,809			8,145,660			36,017,959			29,478,322
Plus: Amortization of Intangible Assets		455,418			300,574			1,613,368			1,071,719
Plus: Amortization of Capitalized Lease Costs		220,743			222,293			880,444			855,000
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments		-0-			-0-			(7,485,266	)		95,336
FFO Attributable to Common Shareholders		18,090,331			15,394,614			69,841,849			54,442,611
Plus: Acquisition Costs		-0-			-0-			-0-			178,526
Plus: Redemption of Preferred Stock		-0-			-0-			-0-			2,467,165
Core FFO Attributable to Common Shareholders		18,090,331			15,394,614			69,841,849			57,088,302
Plus: Stock Compensation Expense		94,756			183,652			433,895			624,706
Plus: Depreciation of Corporate Office Capitalized Costs		39,505			39,508			157,964			156,676
Plus: Amortization of Financing Costs		310,006			284,789			1,220,983			1,234,259
Less: Lease Termination Income		-0-			-0-			(210,261	)		-0-
Less: Gain on Sale of Securities Transactions		-0-			(17,770	)		(111,387	)		(2,311,714	)
Less: Effect of non-cash U.S. GAAP Straight-line Rent Adjustment		(615,441	)		(103,135	)		(1,972,588	)		(1,027,927	)
Less: Recurring Capital Expenditures		(211,335	)		(311,875	)		(985,424	)		(883,864	)
AFFO Attributable to Common Shareholders	$	17,707,822		$	15,469,783		$	68,375,031		$	54,880,438

	For The					For The
	Three Months Ended					Twelve Months Ended
EBITDAre, Adjusted EBITDA	9/30/2018		9/30/2017			9/30/2018			9/30/2017
Net Income Attributable to Common Shareholders	$	7,782,361	$	6,726,087		$	38,815,344		$	22,942,234
Plus: Preferred Dividends		4,377,262		3,536,103			17,190,456			14,861,686
Plus: Redemption of Preferred Stock		-0-		-0-			-0-			2,467,165
Plus: Interest Expense, including Amortization of Financing Costs		8,709,149		6,918,257			32,349,705			25,754,121
Plus: Depreciation and Amortization		10,321,798		8,682,543			38,567,027			31,459,749
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments		-0-		-0-			(7,485,266	)		95,336
EBITDAre		31,190,570		25,862,990			119,437,266			97,580,291
Plus: Acquisition Costs		-0-		-0-			-0-			178,526
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue		25,677		25,492			102,708			101,968
Less: Gain on Sale of Securities Transactions		-0-		(17,770	)		(111,387	)		(2,311,714	)
Adjusted EBITDA	$	31,216,247	$	25,870,712		$	119,428,587		$	95,549,071

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  5 

NOI Reconciliations

(unaudited)

	For The						For The
	Three Months Ended						Twelve Months Ended
Net Operating Income	9/30/2018			9/30/2017			9/30/2018			9/30/2017
Net Income Attributable to Common Shareholders	$	7,782,361		$	6,726,087		$	38,815,344		$	22,942,234
Plus: Redemption of Preferred Stock		-0-			-0-			-0-			2,467,165
Plus: Preferred Dividends		4,377,262			3,536,103			17,190,456			14,861,686
Plus: General & Administrative Expenses		2,723,788			2,501,693			8,776,579			7,809,546
Plus: Acquisition Costs		-0-			-0-			-0-			178,526
Plus: Depreciation		9,671,314			8,185,168			36,175,923			29,634,998
Plus: Amortization of Capitalized Lease Costs and Intangible Assets		650,484			497,375			2,391,104			1,824,751
Plus: Interest Expense, including Amortization of Financing Costs		8,709,149			6,918,257			32,349,705			25,754,121
Less: Dividend and Interest Income		(3,740,054	)		(2,299,911	)		(13,120,465	)		(6,930,564	)
Less: Gain on Sale of Securities Transactions		-0-			(17,770	)		(111,387	)		(2,311,714	)
Less: Gain on Sale of Real Estate Investments		-0-			-0-			(7,485,266	)		-0-
Less: Lease Termination Income		-0-			-0-			(210,261	)		-0-
Net Operating Income – NOI	$	30,174,304		$	26,047,002		$	114,771,732		$	96,230,749

	For The				For The
	Three Months Ended				Twelve Months Ended
Components of Net Operating Income Consists of:	9/30/2018		9/30/2017		9/30/2018		9/30/2017
Revenues:
Rental Revenue	$	30,305,505	$	26,367,855	$	115,864,119	$	97,659,778
Reimbursement Revenue		6,295,189		4,789,059		23,297,730		18,725,527
Total Rental and Reimbursement Revenue		36,600,694		31,156,914		139,161,849		116,385,305
Expenses:
Real Estate Taxes		5,003,666		3,857,976		18,596,239		15,266,634
Operating Expenses		1,422,724		1,251,936		5,793,878		4,887,922
Total Real Estate Taxes and Operating Expenses		6,426,390		5,109,912		24,390,117		20,154,556
Net Operating Income – NOI	$	30,174,304	$	26,047,002	$	114,771,732	$	96,230,749

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  6 

Financial Highlights

(unaudited)

	For The						For The
	Three Months Ended						Twelve Months Ended
	9/30/2018			9/30/2017			9/30/2018			9/30/2017
Weighted Average Common Shares Outstanding
Basic		80,691,790			74,634,201			78,619,440			72,114,078
Diluted		80,888,874			74,800,497			78,802,208			72,249,691
Net Income Attributable to Common Shareholders	$	7,782,361		$	6,726,087		$	38,815,344		$	22,942,234
Basic	$	0.10		$	0.09		$	0.49		$	0.32
Diluted		0.10			0.09			0.49			0.32
Net Operating Income – NOI	$	30,174,304		$	26,047,002		$	114,771,732		$	96,230,749
Basic	$	0.37		$	0.35		$	1.46		$	1.33
Diluted		0.37			0.35			1.46			1.33
Funds From Operations – FFO	$	18,090,331		$	15,394,614		$	69,841,849		$	54,442,611
Basic	$	0.22		$	0.21		$	0.89		$	0.75
Diluted		0.22			0.21			0.89			0.75
Core Funds From Operations - Core FFO	$	18,090,331		$	15,394,614		$	69,841,849		$	57,088,302
Basic	$	0.22		$	0.21		$	0.89		$	0.79
Diluted		0.22			0.21			0.89			0.79
Core FFO Excluding Gain on Sale of Securities Transactions and Excluding Lease Termination Income	$	18,090,331		$	15,376,844		$	69,520,201		$	54,776,588
Basic	$	0.22		$	0.21		$	0.88		$	0.76
Diluted		0.22			0.21			0.88		$	0.76
Adjusted Funds From Operations – AFFO	$	17,707,822		$	15,469,783		$	68,375,031		$	54,880,438
Basic	$	0.22		$	0.21		$	0.87		$	0.76
Diluted		0.22			0.21			0.87		$	0.76
Dividends Declared per Common Share	$	0.17		$	0.16		$	0.68		$	0.64
Dividend/AFFO Payout Ratio		77.3	%		76.2	%		78.2	%		84.2	%

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  7 

Same Property Statistics

(unaudited)

	For The
	Three Months Ended
	9/30/2018				9/30/2017			Change			Change %
Total Square Feet / Total Properties		21,173,581 / 111				18,790,021 / 108			2,383,560			12.7	%
Occupancy Percentage at End of Period		99.6	%			99.3	%		30 bps			0.3	%
Same Property Square Feet / Number of Same Properties				16,927,532 / 98
Same Property Occupancy Percentage at End of Period		99.5	%			99.8	%		(30) bps			(0.3	)%
Same Property Net Operating Income (NOI) (GAAP)	$	24,320,081			$	24,127,404		$	192,677			0.8	%
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment		(314,253	)			(203,251	)		(111,002	)
Same Property Cash NOI	$	24,005,828			$	23,924,153		$	81,675			0.3	%

Same Property Statistics includes all properties owned during the entire periods presented with the exclusion of properties expanded during the periods presented.

The 0.8% increase, amounting to $192,677 in Same Property NOI, consists of $178,175 attributable to increased Same Property NOI from occupied properties and by an increase in Same Property NOI from vacant properties of $14,502.

The 0.3% increase, amounting to $81,675 in Same Property Cash NOI, consists of $70,247 attributable to increased Same Property Cash NOI from occupied properties and by an increase in Same Property Cash NOI from vacant properties of $11,428.

Reconciliation of Same Property NOI to Total NOI

	For The Three Months Ended
	9/30/2018		9/30/2017		Change		Change %
Same Property NOI (GAAP)	$	24,320,081	$	24,127,404	$	192,677		0.8	%
NOI of properties purchased subsequent to June 30, 2017 (seven properties for fiscal 2018 and three properties for fiscal 2017)		4,723,444		568,075
NOI of properties expanded subsequent to June 30, 2017 (two properties for fiscal 2018 and one property for fiscal 2017)		1,130,109		1,066,594
NOI of properties sold subsequent to June 30, 2017 (four properties for fiscal 2018)		670		284,929
Total NOI	$	30,174,304	$	26,047,002	$	4,127,302		15.8	%

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  8 

Same Property Statistics

(unaudited)

	For The
	Twelve Months Ended
	9/30/2018				9/30/2017			Change			Change %
Total Square Feet / Total Properties		21,173,581 / 111				18,790,021 / 108			2,383,560			12.7	%
Occupancy Percentage at End of Period		99.6	%			99.3	%		30 bps			0.3	%
Same Property Square Feet / Number of Same Properties				15,065,707 / 91
Same Property Occupancy Percentage at End of Period		99.5	%			99.8	%		(30 bps	)		(0.3	)%
Same Property Net Operating Income (NOI) (GAAP)	$	83,566,781			$	83,733,452		$	(166,671	)		(0.2	)%
Reversal of Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment		(967,710	)			(1,100,629	)		132,919
Same Property Cash NOI	$	82,599,071			$	82,632,823		$	(33,752	)		0.0	%

Same Property Statistics includes all properties owned during the entire periods presented with the exclusion of properties expanded during the periods presented.

The 0.2% decrease, amounting to $166,671 in Same Property NOI, consists of $44,171 attributable to decreased Same Property NOI from occupied properties and by a decrease in Same Property NOI from vacant properties of $122,500 attributable to a 30 bps decline in Same Property Occupancy Percentage.

The $33,752 decrease in Same Property Cash NOI, consists of $132,509 attributable to increased Same Property Cash NOI from occupied properties offset by a decrease in Same Property Cash NOI from vacant properties of $166,261 attributable to a 30 bps decline in Same Property Occupancy Percentage.

Reconciliation of Same Property NOI to Total NOI

	For The Twelve Months Ended
	9/30/2018		9/30/2017		Change			Change %
Same Property NOI (GAAP)	$	83,566,781	$	83,733,452	$	(166,671	)		(0.2	)%
NOI of properties purchased subsequent to September 30, 2016 (seven properties for fiscal 2018 and ten properties for fiscal 2017)		26,438,218		7,063,623
NOI of properties expanded subsequent to September 30, 2016 (two properties for fiscal 2018 and one property for fiscal 2017)		4,159,745		3,998,426
NOI of properties sold subsequent to September 30, 2016 (four properties for fiscal 2018 and one property for fiscal 2017)		606,988		1,435,248
Total NOI	$	114,771,732	$	96,230,749	$	18,540,983			19.3	%

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  9 

Consolidated Statements of Cash Flows

	For The
	Twelve Months Ended
	9/30/2018			9/30/2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	56,005,800		$	40,271,085
Noncash Items Included in Net Income:
Depreciation & Amortization		39,788,010			32,694,009
Stock Compensation Expense		433,895			624,706
Deferred Straight Line Rent		(1,972,588	)		(1,027,927	)
Gain on Sale of Securities Transactions		(111,387	)		(2,311,714	)
(Gain) Loss on Sale of Real Estate Investments		(7,485,266	)		95,336
Changes in:
Tenant & Other Receivables		1,396,729			357,823
Prepaid Expenses		(754,922	)		(603,887	)
Other Assets & Capitalized Lease Costs		(2,036,854	)		15,353
Accounts Payable, Accrued Expenses & Other Liabilities		265,745			3,753,082
NET CASH PROVIDED BY OPERATING ACTIVITIES		85,529,162			73,867,866
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Real Estate & Intangible Assets		(283,402,845	)		(286,951,980	)
Capital Improvements		(9,084,163	)		(4,974,988	)
Proceeds from Sale of Real Estate Investments		22,083,340			4,125,819
Return of Deposits on Real Estate		450,000			3,400,000
Deposits Paid on Acquisitions of Real Estate		(200,000	)		(450,000	)
Proceeds from Sale of Securities Available for Sale		2,620,166			17,274,946
Purchase of Securities Available for Sale		(64,979,698	)		(71,494,810	)
NET CASH USED IN INVESTING ACTIVITIES		(332,513,200	)		(339,071,013	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Fixed Rate Mortgage Notes Payable		175,160,000			188,809,000
Principal Payments on Fixed Rate Mortgage Notes Payable		(54,354,212	)		(73,594,586	)
Net Draws on Loans Payable		66,517,259			39,300,733
Financing Costs Paid on Debt		(1,469,914	)		(2,190,098	)
Redemption of 7.625% Series A Preferred Stock		-0-			(53,493,750	)
Redemption of 7.875% Series B Preferred Stock		-0-			(57,500,000	)
Proceeds from Underwritten Public Offering of 6.125% Series C Preferred Stock, net of offering costs		-0-			71,003,093
Proceeds from At-The-Market Preferred Equity Program, net of offering costs		40,093,650			35,733,885
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments		77,100,433			81,805,937
Proceeds from the Exercise of Stock Options		569,600			469,300
Preferred Dividends Paid		(16,876,532	)		(14,500,474	)
Common Dividends Paid, net of Reinvestments		(40,657,707	)		(36,163,355	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		246,082,577			179,679,685
NET DECREASE IN CASH AND CASH EQUIVALENTS		(901,461	)		(85,523,462	)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR		10,226,046			95,749,508
CASH AND CASH EQUIVALENTS - END OF YEAR	$	9,324,585		$	10,226,046

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  10 

Capital Structure and Leverage Ratios

(unaudited)

	As of			As of
	9/30/2018			9/30/2017
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs	$	711,545,649		$	591,364,371
Loans Payable		186,608,676			120,091,417
Total Debt		898,154,325			711,455,788
6.125% Series C Cumulative Redeemable Preferred Stock		287,200,025			245,986,125
Common Stock, Paid-In-Capital & Other		510,705,742			466,879,571
Total Shareholders’ Equity		797,905,767			712,865,696
Total Book Capitalization		1,696,060,092			1,424,321,484
Accumulated Depreciation		207,065,634			177,372,518
Total Undepreciated Book Capitalization	$	1,903,125,726		$	1,601,694,002
Shares Outstanding		81,503,134			75,630,521
Market Price Per Share	$	16.72		$	16.19
Equity Market Capitalization	$	1,362,732,400		$	1,224,458,135
Total Debt		898,154,325			711,455,788
Total Preferred Stock		287,200,025			245,986,125
Total Market Capitalization	$	2,548,086,750		$	2,181,900,048
Total Debt	$	898,154,325		$	711,455,788
less: Cash and Cash Equivalents		9,324,585			10,226,046
Net Debt	$	888,829,740		$	701,229,742
less: Securities Available for Sale at Fair Value (Securities)		154,920,545			123,764,770
Net Debt Less Securities	$	733,909,195		$	577,464,972
Net Debt / Total Undepreciated Book Capitalization		46.7	%		43.8	%
Net Debt / Total Market Capitalization		34.9	%		32.1	%
Net Debt Plus Preferred Stock / Total Market Capitalization		46.2	%		43.4	%
Net Debt Less Securities / Total Undepreciated Book Capitalization		38.6	%		36.1	%
Net Debt Less Securities / Total Market Capitalization		28.8	%		26.5	%
Net Debt Less Securities Plus Preferred Stock / Total Market Capitalization		40.1	%		37.7	%
Weighted Average Interest Rate on Fixed Rate Debt		4.07	%		4.18	%
Weighted Average Term on Fixed Rate Debt		11.7 yrs.			11.6 yrs.
Weighted Average Lease Term		8.1 yrs.			7.9 yrs.

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  11 

Capital Structure and Leverage Ratios

(unaudited)

	For The Three Months Ended					For The Twelve Months Ended
	9/30/2018		9/30/2017			9/30/2018			9/30/2017
Net Income	$	12,159,623	$	10,262,190		$	56,005,800		$	40,271,085
Plus: Interest Expense, including Amortization of Financing Costs		8,709,149		6,918,257			32,349,705			25,754,121
Plus: Depreciation and Amortization		10,321,798		8,682,543			38,567,027			31,459,749
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments		-0-		-0-			(7,485,266	)		95,336
EBITDAre		31,190,570		25,862,990			119,437,266			97,580,291
Plus: Acquisition Costs		-0-		-0-			-0-			178,526
Plus: Net Amortization of Acquired Above and Below Market Lease Revenue		25,677		25,492			102,708			101,968
Less: Gain on Sale of Securities Transactions		-0-		(17,770	)		(111,387	)		(2,311,714	)
Adjusted EBITDA	$	31,216,247	$	25,870,712		$	119,428,587		$	95,549,071
Interest Expense, including Amortization of Financing Costs	$	8,709,149	$	6,918,257		$	32,349,705		$	25,754,121
Preferred Dividends		4,377,262		3,536,103			17,190,456			14,861,686
Total Fixed Charges	$	13,086,411	$	10,454,360		$	49,540,161		$	40,615,807
Interest Coverage		3.6 x		3.7 x			3.7 x			3.7 x
Fixed Charge Coverage		2.4 x		2.5 x			2.4 x			2.4 x
Net Debt	$	888,829,740	$	701,229,742		$	888,829,740		$	701,229,742
Net Debt Less Securities		733,909,195		577,464,972			733,909,195			577,464,972
Total Preferred Stock		287,200,025		245,986,125			287,200,025			245,986,125
Annualized Adjusted EBITDA		124,864,988		103,482,848			119,428,587			95,549,071
Net Debt / Adjusted EBITDA		7.1 x		6.8 x			7.4 x			7.3 x
Net Debt Less Securities / Adjusted EBITDA		5.9 x		5.6 x			6.1 x			6.0 x
Net Debt + Preferred Stock / Adjusted EBITDA		9.4 x		9.2 x			9.8 x			9.9 x
Net Debt Less Securities + Preferred Stock / Adjusted EBITDA		8.2 x		8.0 x			8.5 x			8.6 x

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  12 

Debt Maturity 

(Unaudited)

					Loans							% of
Fiscal Year Ended		Mortgages			Payable				Total			Total
2019		$	60,151,223		$	26,608,676		(B)	$	86,759,899			9.6	%
2020			48,605,542			160,000,000		(C)		208,605,542			23.0	%
2021			50,098,257			-0-				50,098,257			5.5	%
2022			72,031,353			-0-				72,031,353			7.9	%
2023			50,522,349			-0-				50,522,349			5.6	%
Thereafter			438,359,631			-0-				438,359,631			48.4	%
Total as of 9/30/2018	(A)	$	719,768,355		$	186,608,676			$	906,377,031			100.0	%
Weighted Average Interest Rate			4.07	%		3.74	%			4.00	%
Weighted Average Term			11.7 yrs.			1.7 yrs.				9.6 yrs.

(A)	Mortgages does not include unamortized debt issuance costs of $8,222,706.
(B)	Represents margin debt which is due upon demand. Subsequent to fiscal yearend, margin debt was paid off.
(C)	Represents the amount drawn down on a line of credit that has a one year extension option, which is not reflected above. Subsequent to fiscal yearend, $50,000,000 was paid down, which reduced our amount outstanding to $110,000,000.

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  13 

Securities Portfolio Historic Performance (Fiscal Year)

(unaudited)

 

Fiscal Year	Securities Portfolio Cost(A)		Securities Available for Sale(A)		Dividend Income		Net Realized Gain on Sale of Securities		Change in Unrealized Gain/ (Loss)(B)			Total Return			Total Return %
2010	$	24,027,834	$	27,824,665	$	2,387,757	$	2,609,149	$	6,319,226		$	11,316,132			47.10	%
2011		32,401,668		42,517,725		2,981,534		5,238,203		(7,747,894	)		471,843			1.46	%
2012		41,896,896		44,265,059		3,144,837		6,044,065		3,015,774			12,204,676			29.13	%
2013		56,301,236		61,685,173		3,861,374		7,133,252		(3,394,669	)		7,599,957			13.50	%
2014		43,462,472		45,451,740		3,863,136		2,166,766		(1,867,912	)		4,161,990			9.58	%
2015		59,190,047		59,311,403		3,707,498		805,513		(5,562,959	)		(1,049,948	)		(1.77	)%
2016		59,982,840		54,541,237		5,607,403		4,398,599		18,383,870			28,389,872			47.33	%
2017		60,662,627		73,604,894		6,919,973		2,311,714		(6,371,702	)		2,859,985			4.71	%
2018		117,194,205		123,764,770		13,099,316		111,387		(31,315,144	)		(18,104,441	)		(15.45	)%
Total					$	45,572,828	$	30,818,648	$	(28,541,410	)	$	47,850,066			Avg. 15.07	%

(A)	Fiscal Year beginning balance
(B)	Fiscal Year end balance

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  14 

Securities Portfolio Historic Performance (Fiscal Year)

(unaudited)

 

FISCAL YEAR	MREIC REIT Portfolio (%)			MSCI REIT Index (RMS)(%)		S&P 500 Index (%)			MREIC vs. MSCI REIT Index (RMS) Outperformance in BPS ∆			MREIC vs. S&P 500 Index Outperformance in BPS ∆
2010		47.10			30.54		10.16			1656			3694
2011		1.46			1.26		1.14			20			32
2012		29.13			32.44		30.20			(331	)		(107	)
2013		13.50			6.63		21.59			687			(809	)
2014		9.58			13.26		19.73			(368	)		(1015	)
2015		(1.77	)		9.47		(0.61	)		(1124	)		(116	)
2016		47.33			19.83		15.43			2750			3190
2017		4.71			0.54		18.61			417			(1390	)
2018		(15.45	)		4.78		15.22			(2023	)		(3067	)
Average		15.07			13.19		14.61			187			46

Source: SNL Financial

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  15 

Property Table by Tenant

(unaudited)

		Property		Square		Occupied Square		% of Occupied			Annual		% of Total Ann.			Rent Per sf		Undepreciated			Mortgage
Tenant		Count		Footage		Footage		sf			Rent		Rent			Occup.		Cost			Balance
FedEx Ground Package System, Inc.			44		8,538,404		8,538,404		40.3	%	$	65,499,000		51.7	%	$	7.67	$	914,674,060		$	413,130,189
FedEx Corporation			16		1,544,996		1,544,996		7.3	%		8,100,000		6.3	%		5.24		109,379,980			18,744,507
Total FedEx			60		10,083,400		10,083,400		47.6	%		73,599,000		58.0	%		7.30		1,024,054,040			431,874,696
Milwaukee Electric Tool Corporation			1		861,889		861,889		4.2	%		3,032,000		2.4	%		3.52		36,914,917			21,722,567
Shaw Industries, Inc.			1		831,764		831,764		3.9	%		3,551,000		2.8	%		4.27		56,025,945			32,215,696
ULTA, Inc.			1		671,354		671,354		3.3	%		2,702,000		2.1	%		4.02		37,512,071			20,159,025
Amazon.com Services, Inc. (Amazon.com, Inc.)			2		662,942		662,942		3.1	%		3,904,000		3.1	%		5.89		62,931,258			37,845,988
Jim Beam Brands Company (Beam Suntory)			1		599,840		599,840		2.8	%		2,051,000		1.6	%		3.42		28,000,000			16,639,132
International Paper Company			2		578,472		578,472		2.7	%		2,592,000		2.0	%		4.48		36,175,715			20,662,730
TreeHouse Private Brands, Inc.			1		558,600		558,600		2.6	%		2,206,000		1.7	%		3.95		26,807,852			15,305,669
B. Braun Medical Inc.			1		399,440		399,440		1.9	%		2,130,000		1.7	%		5.33		29,973,199			19,187,819
CBOCS Distribution, Inc. (Cracker Barrel)			1		381,240		381,240		1.8	%		1,447,000		1.1	%		3.80		14,215,126			7,217,469
Best Buy Warehousing Logistics, Inc.			1		368,060		368,060		1.7	%		1,676,000		1.3	%		4.55		19,600,000			9,300,481
Coca-Cola			2		323,358		323,358		1.5	%		1,693,000		1.3	%		5.24		20,504,069			4,580,073
Autoneum North America, Inc.			1		315,560		315,560		1.5	%		1,703,000		1.3	%		5.40		21,040,395			14,471,117
Science Applications International Corporation			1		302,400		302,400		1.4	%		1,491,000		1.2	%		4.93		13,410,102			-0-
United Technologies Corporation			3		283,150		283,150		1.3	%		1,929,000		1.5	%		6.81		27,687,512			6,455,552
Bunzl USA Holdings, Inc.			2		268,778		268,778		1.3	%		1,474,000		1.2	%		5.48		18,708,688			12,170,963
Woodstream Corporation	(A)		1		256,000		256,000		1.2	%		914,000		0.7	%		3.57		8,935,160			-0-
Anda Pharmaceuticals, Inc.			1		234,660		234,660		1.1	%		1,205,000		1.0	%		5.14		14,550,000			7,564,186
UGN, Inc.			1		232,200		232,200		1.1	%		1,070,000		0.8	%		4.61		17,524,760			7,126,384
Mickey Thompson Performance Tires and Wheels (Cooper Tire)			1		219,765		219,765		1.0	%		1,501,000		1.2	%		6.83		18,934,065			12,130,343
Rinnai America Corporation			1		218,120		218,120		1.0	%		831,000		0.7	%		3.81		14,933,683			-0-
Anheuser-Busch, Inc.			1		184,800		184,800		0.9	%		821,000		0.6	%		4.44		12,697,848			-0-
Carlisle Tire & Wheel Company			1		179,280		179,280		0.8	%		739,000		0.6	%		4.12		7,232,986			-0-
NF&M International, Inc.	(B)		1		174,802		174,802		0.8	%		835,000		0.7	%		4.78		5,408,790			-0-
Home Depot USA, Inc.			1		171,200		171,200		0.8	%		997,000		0.8	%		5.82		11,303,317			-0-
Victory Packaging, L.P.			1		148,000		148,000		0.7	%		502,000		0.4	%		3.39		5,451,629			-0-
Challenger Lifts, Inc. (Snap-On Inc.)			1		137,500		137,500		0.6	%		838,000		0.7	%		6.09		11,304,000			6,525,135
Altec Industries, Inc.	(A)		1		126,880		126,880		0.6	%		371,000		0.3	%		2.92		4,428,488			-0-
General Electric Company			1		125,860		125,860		0.6	%		1,321,000		1.0	%		10.50		19,950,000			11,199,661
The American Bottling Company (Keurig Dr Pepper)			2		110,080		110,080		0.5	%		743,000		0.6	%		6.75		10,498,031			1,685,288
Style Crest, Inc.			1		106,507		106,507		0.5	%		387,000		0.3	%		3.63		7,246,325			-0-
Pittsburgh Glass Works, LLC			1		102,135		102,135		0.5	%		442,000		0.3	%		4.33		4,245,913			-0-
Holland 1916 Inc.			1		95,898		95,898		0.5	%		349,000		0.3	%		3.64		7,397,881			-0-
National Oilwell Varco, Inc.			1		91,295		91,295		0.4	%		754,000		0.6	%		8.26		8,163,278			2,148,201
Joseph T. Ryerson and Son, Inc.			1		89,052		89,052		0.4	%		506,000		0.4	%		5.68		6,977,442			-0-
CHEP USA, Inc.			1		83,000		83,000		0.4	%		500,000		0.4	%		6.02		7,463,672			-0-
Sherwin-Williams Company			2		78,887		78,887		0.4	%		643,000		0.5	%		8.15		7,244,128			-0-
RGH Enterprises, Inc. (Cardinal Health)			1		75,000		75,000		0.4	%		607,000		0.5	%		8.09		5,525,600			-0-
Tampa Bay Grand Prix			1		68,385		68,385		0.3	%		297,000		0.2	%		4.34		5,677,982			-0-
Various Tenants at Retail Shopping Center			1		64,220		64,220		0.3	%		807,000		0.6	%		12.57		3,111,777			-0-
SOFIVE, Inc.			1		60,400		60,400		0.3	%		558,000		0.4	%		9.24		4,942,402			1,580,180
Kellogg Sales Company			1		54,812		54,812		0.3	%		329,000		0.3	%		6.00		3,494,108			-0-
Siemens Real Estate			1		51,130		51,130		0.2	%		464,000		0.4	%		9.07		4,452,425			-0-
Foundation Building Materials, LLC			1		36,270		36,270		0.2	%		172,000		0.2	%		4.74		2,523,644			-0-
Graybar Electric Company			1		26,340		26,340		0.2	%		109,000		0.2	%		4.14		1,885,254			-0-
Tenant Total as of 9/30/18			111		21,092,725		21,092,725		99.6	%	$	126,792,000		100.0	%	$	6.01	$	1,717,065,477	(C)		$719,768,355
Vacant	(B)		1		80,856		-0-		0.0	%		-0-		0.0	%		-0-		2,501,877			-0-
Total as of 9/30/18			111		21,173,581		21,092,725		99.6	%	$	126,792,000		100.0	%	$	6.01	$	1,719,567,354		$	719,768,355
Acquisitions Subsequent to 9/30/18
FedEx Ground Package System, Inc.			1		347,145		347,145		1.6	%		5,328,000		4.0	%		15.35
Pro Forma Total with Acquisitons Subsequent to 9/30/18			112		21,520,726		21,439,870		99.6	%	$	132,120,000		100.0	%	$	6.16

(A)	Woodstream Corporation and Altec Industries, Inc. are located at one property and therefore are counted as one property in the Property Count total.
(B)	NF&M International is located in a 255,658 square foot Industrial Park in Monaca (Pittsburgh), PA, of which 80,856 square feet is vacant.  This Industrial Park is counted as one property in the Property Count total.
	Other than the two properties indicated in footnotes (A) and (B) and the one retail property, all other properties are single-tenant.
(C)	Does not include unamortized debt issuance costs of $8,222,706.

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  16 

Property Table by State

(unaudited)

	Property		Square		Occupied Square		% of Total			Annual		% of Total			Rent Per		Undepreciated			Mortgage
State	Count		Footage		Footage		sf			Rent		Ann. Rent			sf Occup.		Cost			Balance
Florida		13		2,211,583		2,211,583		10.4	%	$	15,711,000		12.4	%	$	7.10	$	226,738,000		$	100,873,289
Texas		10		1,781,967		1,781,967		8.4	%		13,825,000		10.9	%		7.76		182,253,655			78,083,742
Ohio		9		1,550,706		1,550,706		7.3	%		8,908,000		7.0	%		5.74		114,243,557			40,030,595
Georgia		5		1,513,176		1,513,176		7.1	%		8,805,000		6.9	%		5.82		138,527,838			72,254,485
Kentucky		3		1,295,940		1,295,940		6.1	%		5,095,000		4.0	%		3.93		66,111,852			38,469,936
South Carolina		6		1,273,676		1,273,676		6.0	%		9,478,000		7.5	%		7.44		127,234,979			59,204,763
Mississippi		4		1,158,889		1,158,889		5.8	%		4,466,000		3.5	%		3.85		55,250,862			29,286,753
Indiana		2		999,176		999,176		4.8	%		4,417,000		3.5	%		4.42		63,016,154			30,596,176
Illinois		9		958,045		958,045		4.5	%		6,117,000		4.8	%		6.38		82,688,099			8,563,797
North Carolina		4		939,706		939,706		4.4	%		5,663,000		4.5	%		6.03		85,785,896			42,676,806
Tennessee		3		891,777		891,777		4.2	%		3,150,000		2.5	%		3.47		33,968,652			12,278,845
Michigan		4		833,054		833,054		3.9	%		5,574,000		4.4	%		6.69		73,039,812			25,763,057
Kansas		4		813,043		813,043		3.8	%		4,619,000		3.6	%		5.68		60,943,937			30,006,574
Missouri		4		739,330		739,330		3.5	%		2,828,000		2.2	%		3.83		34,987,692			6,633,001
Oklahoma		4		614,941		614,941		2.9	%		3,916,000		3.1	%		6.37		54,939,874			29,652,940
New York		3		518,565		518,565		2.4	%		3,886,000		3.1	%		7.49		51,336,423			21,328,714
Pennsylvania		3		504,040		423,184		2.4	%		2,807,000		2.2	%		6.63		36,883,632			14,452,942
Alabama		2		451,595		451,595		2.1	%		2,625,000		2.1	%		5.81		39,714,135			19,203,298
Virginia		5		407,265		407,265		1.9	%		2,449,000		1.9	%		6.01		34,680,077			4,395,246
Colorado		2		295,227		295,227		1.4	%		2,437,000		1.9	%		8.25		35,674,117			17,065,759
Arizona		1		283,358		283,358		1.3	%		1,361,000		1.1	%		4.80		16,824,226			3,719,709
Wisconsin		2		238,666		238,666		1.1	%		1,295,000		1.0	%		5.43		16,336,361			2,640,432
Washington		1		210,445		210,445		1.0	%		1,962,000		1.5	%		9.32		30,228,547			17,757,364
Louisiana		1		175,315		175,315		0.8	%		1,262,000		1.0	%		7.20		18,410,000			11,133,990
Maryland		1		148,881		148,881		0.7	%		1,452,000		1.1	%		9.75		14,512,355			-0-
New Jersey		2		124,620		124,620		0.6	%		1,365,000		1.1	%		10.95		8,054,179			1,580,180
Nebraska		1		89,115		89,115		0.4	%		446,000		0.4	%		5.00		5,944,691			-0-
Minnesota		1		60,398		60,398		0.3	%		372,000		0.3	%		6.16		5,220,000			2,115,962
Connecticut		1		54,812		54,812		0.3	%		329,000		0.3	%		6.00		3,494,108			-0-
Iowa		1		36,270		36,270		0.2	%		172,000		0.2	%		4.74		2,523,644			-0-
Total as of 9/30/18		111		21,173,581		21,092,725		100.0	%	$	126,792,000		100.0	%	$	6.01	$	1,719,567,354	(A)	$	719,768,355
Acquisitions Subsequent to 9/30/18
New Jersey		1		347,145		347,145		1.6	%		5,328,000		4.0	%		15.35
Pro Forma Total with Acquisitons Subsequent to 9/30/18		112		21,520,726		21,439,870		100.0	%	$	132,120,000		100.0	%	$	6.16

(A) Does not include unamortized debt issuance costs of $8,222,706.

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  17 

Lease Expirations

(unaudited)

		Property		Square		% of Total			Annual		% of Total			Rent Per sf		Lease Exp.		Undepreciated			Mortgage
Fiscal Year		Count		Footage		sf			Rent		Ann. Rent			Occup.		Term in Years		Cost			Balance
2019			6		681,395		3.2	%	$	3,914,000		3.1	%		5.74		0.6	$	46,037,022		$	465,749
2020			4		383,449		1.8	%		2,129,000		1.7	%		5.55		1.7		27,452,849			-0-
2021	(A)		10		1,206,723		5.7	%		5,467,000		4.3	%		4.53		2.7		69,377,107			7,832,154
2022			7		1,138,320		5.4	%		6,419,000		5.1	%		5.64		3.5		75,991,657			25,307,371
2023	(A)		13		1,668,804		7.9	%		9,481,000		7.5	%		5.68		4.7		116,932,264			21,594,265
2024			12		1,584,634		7.5	%		10,094,000		8.0	%		6.37		5.7		122,194,406			34,459,394
2025	(A)		9		2,404,478		11.4	%		12,271,000		9.7	%		5.10		6.6		159,917,562			74,976,653
2026			7		982,226		4.6	%		7,922,000		6.3	%		8.07		7.6		105,330,525			40,305,777
2027			11		2,304,616		10.9	%		12,629,000		10.0	%		5.48		8.9		178,945,464			72,819,938
2028			11		2,571,915		12.1	%		13,826,000		10.9	%		5.38		9.5		181,975,883			71,085,896
2029			5		1,171,338		5.5	%		5,454,000		4.3	%		4.66		10.5		76,019,210			32,457,568
2030			4		1,044,832		4.9	%		7,403,000		5.8	%		7.09		11.5		113,789,841			61,881,366
2031			3		963,269		4.5	%		7,122,000		5.6	%		7.39		12.6		104,367,000			64,988,499
2032			6		1,724,838		8.3	%		13,134,000		10.4	%		7.61		13.6		202,011,552			126,728,056
2033			2		639,068		3.0	%		6,514,000		5.0	%		10.19		14.6		106,803,506			69,560,000
2034			1		558,600		2.6	%		2,206,000		1.7	%		3.95		15.1		26,807,852			15,305,669
Various tenants at retail shopping center			1		64,220		0.3	%		807,000		0.6	%		12.57		-0-		3,111,777			-0-
Vacant	(A)		1		80,856		0.4	%		-0-		0.0	%		-0-		-0-		2,501,877			-0-
Total as of 9/30/18			111		21,173,581		100.0	%	$	126,792,000		100.0	%	$	6.01		8.1	$	1,719,567,354	(B)	$	719,768,355
Acquisitions Subsequent to 9/30/18
2032			1		347,145		1.6	%		5,328,000		4.0	%		15.35		13.8
Pro Forma Total with Acquisitons Subsequent to 9/30/18			112		21,520,726		100.0	%	$	132,120,000		100.0	%	$	6.16		8.2

(A)

Included in 2021 is Woodstream Corporation and included in 2023 is Altec Industries which both occupy one property. Included in 2025 is NF&M International, which occupies 174,802 square feet of a 255,658 square foot Industrial Park.  The remaining 80,856 square feet is included in Vacant.  Each of these properties are counted as one property in the Property Count Total.  Other than these properties and the one retail property, all other properties are single-tenant.

(B)

Does not include unamortized debt issuance costs of $8,222,706.

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  18 

Recent Acquisitions During Fiscal 2018

(unaudited)

				Date of	Square		Annual		Rent Per		Lease	Purchase		Initial Mortgage
No	Tenant	City (MSA)	State	Acquisition	Footage		Rent		sf Occup.		Expiration	Price		Balance
1	FedEx Corporation	Charleston	SC	11/2/2017		121,683	$	1,315,000	$	10.81	8/31/2032	$	21,872,170	$	14,200,000
2	Amazon.com Services, Inc. (Amazon.com, Inc.)	Oklahoma City	OK	11/30/2017		300,000		1,884,000		6.28	10/31/2027		30,250,000		19,600,000
3	Shaw Industries, Inc.	Savannah	GA	1/22/2018		831,764		3,551,000		4.27	9/30/2027		57,483,636		33,300,000
4	B. Braun Medical Inc.	Daytona Beach	FL	4/6/2018		399,440		2,130,000		5.33	4/1/2028		30,750,540		19,500,000
5	Amazon.com Services, Inc. (Amazon.com, Inc.)	Mobile	AL	6/28/2018		362,942		2,020,000		5.57	11/30/2028		33,688,276		19,000,000
6	FedEx Ground Package System, Inc.	Charleston	SC	8/15/2018		265,318		2,713,000		10.23	6/30/2033		47,174,296		29,860,000
7	FedEx Ground Package System, Inc.	Braselton (Atlanta)	GA	9/6/2018		373,750		3,801,000		10.17	2/28/2033		61,113,264		39,700,000
	Total as of 9/30/18					2,654,897	$	17,414,000	$	6.56		$	282,332,182	$	175,160,000
	Acquisitons Subsequent to 9/30/18
1	FedEx Ground Package System, Inc.	Trenton	NJ	10/19/2018		347,145		5,328,000		15.35	6/30/2032		85,248,352		55,000,000

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  19 

Property Table

(unaudited)

				Fiscal Year				Square		Annual		Rent Per sf		Lease Exp. Term in		Undepreciated		Mortgage
No	Tenant	City (MSA)	State	Acquisition	Occup.			Footage		Rent		Occup.		Years		Cost		Balance
1	Milwaukee Electric Tool Corporation	Olive Branch (Memphis, TN)	MS	2013		100.0	%		861,889	$	3,032,000	$	3.52		9.8	$	36,914,917	$	21,722,567
2	Shaw Industries, Inc.	Savannah	GA	2018		100.0	%		831,764		3,551,000		4.27		9.0		56,025,945		32,215,696
3	ULTA, Inc.	Greenwood (Indianapolis)	IN	2015		100.0	%		671,354		2,702,000		4.02		6.8		37,512,071		20,159,025
4	Jim Beam Brands Company (Beam Suntory)	Frankfort (Lexington)	KY	2015		100.0	%		599,840		2,051,000		3.42		6.3		28,000,000		16,639,132
5	TreeHouse Private Brands, Inc.	Buckner (Louisville)	KY	2014		100.0	%		558,600		2,206,000		3.95		15.1		26,807,852		15,305,669
6	FedEx Corporation	Memphis	TN	2010		100.0	%		449,900		1,384,000		3.08		10.7		14,614,986		5,061,376
7	B. Braun Medical Inc.	Daytona Beach	FL	2018		100.0	%		399,440		2,130,000		5.33		9.5		29,973,199		19,187,819
8	Woodstream Corporation	St. Joseph	MO	2001		100.0	%		256,000		914,000		3.57		3.0		8,935,160		-0-
	Altec Industries, Inc.	St. Joseph	MO	2001		100.0	%		126,880		371,000		2.92		4.4		4,428,488		-0-
9	CBOCS Distribution, Inc. (Cracker Barrel)	Lebanon (Nashville)	TN	2011		100.0	%		381,240		1,447,000		3.80		5.8		14,215,126		7,217,469
10	FedEx Ground Package System, Inc.	Braselton (Atlanta)	GA	2018		100.0	%		373,750		3,801,000		10.17		14.4		60,227,126		39,700,000
11	Best Buy Warehousing Logistics, Inc.	Streetsboro (Cleveland)	OH	2012		100.0	%		368,060		1,676,000		4.55		3.3		19,600,000		9,300,481
12	Amazon.com Services, Inc. (Amazon.com, Inc.)	Mobile	AL	2018		100.0	%		362,942		2,020,000		5.57		10.2		33,052,316		18,832,395
13	FedEx Ground Package System, Inc.	Concord (Charlotte)	NC	2017		100.0	%		354,482		2,537,000		7.16		13.7		40,043,145		24,863,355
14	FedEx Ground Package System, Inc.	Mesquite (Dallas)	TX	2017		100.0	%		351,874		3,195,000		9.08		13.5		49,880,493		30,928,224
15	FedEx Ground Package System, Inc.	Walker (Grand Rapids)	MI	2017		100.0	%		343,483		2,102,000		6.12		13.3		31,654,987		19,468,554
16	FedEx Ground Package System, Inc.	Hamburg (Buffalo)	NY	2017		100.0	%		338,584		2,313,000		6.83		12.5		34,850,000		21,328,714
17	FedEx Ground Package System, Inc.	Concord (Charlotte)	NC	2016		100.0	%		330,717		2,237,000		6.76		6.8		33,044,797		17,813,451
18	FedEx Ground Package System, Inc.	Indianapolis	IN	2014		100.0	%		327,822		1,715,000		5.23		9.1		25,504,083		10,437,151
19	Autoneum North America, Inc.	Aiken (Augusta, GA)	SC	2017		100.0	%		315,560		1,703,000		5.40		13.6		21,040,395		14,471,117
20	FedEx Ground Package System, Inc.	Olathe (Kansas City)	KS	2016		100.0	%		313,763		2,200,000		7.01		12.7		31,737,000		19,956,867
21	FedEx Ground Package System, Inc.	Davenport (Orlando)	FL	2016		100.0	%		310,922		2,609,000		8.39		12.6		37,780,000		23,702,918
22	FedEx Ground Package System, Inc.	Ft. Worth (Dallas)	TX	2015		100.0	%		304,608		2,373,000		7.79		11.6		35,300,832		20,753,864
23	Science Applications International Corporation	Hanahan (Charleston)	SC	2005		100.0	%		302,400		1,491,000		4.93		0.6		13,410,102		-0-
24	Amazon.com Services, Inc. (Amazon.com, Inc.)	Oklahoma City	OK	2018		100.0	%		300,000		1,884,000		6.28		9.1		29,878,942		19,013,593
25	International Paper Company	Kenton	OH	2017		100.0	%		298,472		1,244,000		4.17		8.9		17,881,607		11,473,387
26	FedEx Ground Package System, Inc.	Jacksonville	FL	2015		100.0	%		297,579		1,998,000		6.71		11.3		30,735,702		16,243,754
27	Western Container Corp. (Coca-Cola)	Tolleson (Phoenix)	AZ	2003		100.0	%		283,358		1,361,000		4.80		8.6		16,824,226		3,719,709
28	International Paper Company	Edwardsville (Kansas City)	KS	2014		100.0	%		280,000		1,348,000		4.81		4.9		18,294,108		9,189,343
29	FedEx Ground Package System, Inc.	Charleston	SC	2018		100.0	%		265,318		2,713,000		10.23		14.8		46,576,380		29,860,000
30	NF&M International, Inc.	Monaca (Pittsburgh)	PA	1988		68.4	%		255,658		835,000		4.78		6.3		7,910,666		-0-
31	FedEx Ground Package System, Inc.	Orion	MI	2007		100.0	%		245,633		1,908,000		7.77		4.8		22,890,124		-0-
32	FedEx Ground Package System, Inc.	Homestead (Miami)	FL	2017		100.0	%		237,756		2,282,000		9.60		13.5		37,873,120		23,313,676
33	Anda Pharmaceuticals, Inc.	Olive Branch (Memphis, TN)	MS	2012		100.0	%		234,660		1,205,000		5.14		3.8		14,550,000		7,564,186
34	UGN, Inc.	Monroe (Cincinnati)	OH	2015		100.0	%		232,200		1,070,000		4.61		11.4		17,524,760		7,126,384
35	FedEx Ground Package System, Inc.	Colorado Springs	CO	2016		100.0	%		225,362		1,832,000		8.13		7.3		29,320,066		16,651,710
36	Mickey Thompson Performance Tires and Wheels (Cooper Tire)	Stow	OH	2017		100.0	%		219,765		1,501,000		6.83		8.9		18,934,065		12,130,343
37	Rinnai America Corporation	Griffin (Atlanta)	GA	2006		100.0	%		218,120		831,000		3.81		2.3		14,933,683		-0-
38	FedEx Ground Package System, Inc.	Ft. Myers	FL	2017		100.0	%		213,672		1,418,000		6.64		8.9		21,663,635		13,280,803
39	FedEx Ground Package System, Inc.	Burlington (Seattle/Everett)	WA	2016		100.0	%		210,445		1,962,000		9.32		11.9		30,228,547		17,757,364
40	FedEx Ground Package System, Inc.	Sauget (St. Louis, MO)	IL	2015		100.0	%		198,773		1,036,000		5.21		10.7		15,204,950		8,563,797
41	Anheuser-Busch, Inc.	Granite City (St. Louis, MO)	IL	2001		100.0	%		184,800		821,000		4.44		3.2		12,697,848		-0-
42	Carrier Enterprise, LLC (United Technologies)	Carrollton (Dallas)	TX	2010		100.0	%		184,317		1,241,000		6.73		5.3		17,819,203		6,455,552
43	FedEx Ground Package System, Inc.	Spring (Houston)	TX	2014		100.0	%		181,176		1,581,000		8.73		6.0		19,294,396		7,924,865
44	Carlisle Tire & Wheel Company	Edwardsville (Kansas City)	KS	2003		100.0	%		179,280		739,000		4.12		4.8		7,232,986		-0-
45	FedEx Ground Package System, Inc.	Ft. Mill (Charlotte, NC)	SC	2010		100.0	%		176,939		1,581,000		8.94		9.9		17,074,037		724,766
46	FedEx Ground Package System, Inc.	Covington (New Orleans)	LA	2016		100.0	%		175,315		1,262,000		7.20		6.8		18,410,000		11,133,990
47	FedEx Ground Package System, Inc.	Livonia (Detroit)	MI	2013		100.0	%		172,005		1,194,000		6.94		3.5		13,762,030		6,294,503
48	Home Depot USA, Inc.	Montgomery (Chicago)	IL	2004		100.0	%		171,200		997,000		5.82		1.8		11,303,317		-0-
49	FedEx Ground Package System, Inc.	Tampa	FL	2004		100.0	%		170,779		1,624,000		9.51		7.8		19,701,575		5,144,319
50	FedEx Ground Package System, Inc.	Edinburg	TX	2011		100.0	%		164,207		1,097,000		6.68		8.0		12,039,014		-0-

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  20 

Property Table

(unaudited)

				Fiscal Year				Square		Annual		Rent Per sf		Lease Exp. Term in		Undepreciated		Mortgage
No	Tenant	City (MSA)	State	Acquisition	Occup.			Footage		Rent		Occup.		Years		Cost		Balance
51	FedEx Ground Package System, Inc.	Lindale (Tyler)	TX	2015		100.0	%		163,378	$	725,000	$	4.44		5.8	$	9,965,550	$	5,638,258
52	Bunzl Distribution Midcentral, Inc.	Kansas City	MO	2015		100.0	%		158,417		752,000		4.75		3.0		9,980,250		6,633,001
53	FedEx Ground Package System, Inc.	Oklahoma City	OK	2012		100.0	%		158,340		1,048,000		6.62		6.8		12,584,462		3,416,097
54	FedEx Ground Package System, Inc.	Waco	TX	2012		100.0	%		150,710		1,078,000		7.15		6.9		12,551,368		4,234,777
55	FedEx Ground Package System, Inc.	Beltsville (Washington, DC)	MD	2001		100.0	%		148,881		1,452,000		9.75		9.8		14,512,355		-0-
56	Victory Packaging, L.P.	Fayetteville	NC	1997		100.0	%		148,000		502,000		3.39		2.4		5,451,629		-0-
57	FedEx Ground Package System, Inc.	El Paso	TX	2006		100.0	%		144,149		1,345,000		9.33		5.0		12,431,192		-0-
58	FedEx Ground Package System, Inc.	Cocoa	FL	2008		100.0	%		144,138		1,112,000		7.71		6.0		14,127,449		-0-
59	FedEx Ground Package System, Inc.	Cudahy (Milwaukee)	WI	2001		100.0	%		139,564		827,000		5.93		8.8		9,766,361		-0-
60	Challenger Lifts, Inc. (Snap-On Inc.)	Louisville	KY	2016		100.0	%		137,500		838,000		6.09		7.7		11,304,000		6,525,135
61	FedEx Ground Package System, Inc.	Richfield (Cleveland)	OH	2006		100.0	%		131,152		1,493,000		11.38		6.0		16,447,178		-0-
62	General Electric Company	Imperial (Pittsburgh)	PA	2016		100.0	%		125,860		1,321,000		10.50		7.3		19,950,000		11,199,661
63	FedEx Ground Package System, Inc.	Wheeling (Chicago)	IL	2003		100.0	%		123,000		1,272,000		10.34		8.7		18,982,474		-0-
64	FedEx Ground Package System, Inc.	Altoona	PA	2014		100.0	%		122,522		651,000		5.31		4.9		9,022,966		3,253,281
65	FedEx Corporation	Charleston	SC	2018		100.0	%		121,683		1,315,000		10.81		13.9		21,519,412		13,683,131
66	FedEx Corporation	Mechanicsville (Richmond)	VA	2001		100.0	%		112,799		541,000		4.80		4.6		7,792,395		-0-
67	FedEx Corporation	Orlando	FL	2008		100.0	%		110,638		666,000		6.02		9.2		8,774,524		-0-
68	Bunzl Distribution Oklahoma, Inc.	Oklahoma City	OK	2017		100.0	%		110,361		722,000		6.54		5.9		8,728,439		5,537,962
69	Style Crest, Inc.	Winston-Salem	NC	2002		100.0	%		106,507		387,000		3.63		2.5		7,246,325		-0-
70	FedEx Ground Package System, Inc.	Cheektowaga (Buffalo)	NY	2002		100.0	%		104,981		966,000		9.20		0.9		10,960,823		-0-
71	FedEx Ground Package System, Inc.	West Chester Twp. (Cincinnati)	OH	1999		100.0	%		103,818		543,000		5.23		4.9		5,733,686		-0-
72	FedEx Ground Package System, Inc.	Roanoke	VA	2013		100.0	%		103,402		755,000		7.30		4.6		10,200,000		4,395,246
73	Pittsburgh Glass Works, LLC	O’ Fallon (St. Louis)	MO	1994		100.0	%		102,135		442,000		4.33		2.8		4,245,913		-0-
74	FedEx Ground Package System, Inc.	Green Bay	WI	2013		100.0	%		99,102		468,000		4.72		4.7		6,570,000		2,640,432
75	Holland 1916 Inc.	Liberty (Kansas City)	MO	1998		100.0	%		95,898		349,000		3.64		0.7		7,397,881		-0-
76	FedEx Corporation	Jacksonville	FL	1999		100.0	%		95,883		533,000		5.56		10.7		6,396,958		-0-
77	FedEx Corporation	Tampa	FL	2006		100.0	%		95,662		603,000		6.30		9.2		7,857,120		-0-
78	FedEx Ground Package System, Inc.	Hanahan (Charleston)	SC	2005		100.0	%		91,776		675,000		7.35		0.2		7,614,653		465,749
79	National Oilwell Varco, Inc.	Houston	TX	2010		100.0	%		91,295		754,000		8.26		4.0		8,163,278		2,148,201
80	FedEx Corporation	Omaha	NE	1999		100.0	%		89,115		446,000		5.00		5.1		5,944,691		-0-
81	Joseph T. Ryerson and Son, Inc.	Elgin (Chicago)	IL	2002		100.0	%		89,052		506,000		5.68		1.3		6,977,442		-0-
82	FedEx Ground Package System, Inc.	Huntsville	AL	2005		100.0	%		88,653		605,000		6.82		7.8		6,661,819		370,903
83	CHEP USA, Inc.	Roanoke	VA	2007		100.0	%		83,000		500,000		6.02		6.4		7,463,672		-0-
84	FedEx Corporation	Bedford Heights (Cleveland)	OH	2007		100.0	%		82,269		436,000		5.30		9.9		6,919,836		-0-
85	RGH Enterprises, Inc. (Cardinal Health)	Halfmoon (Albany)	NY	2012		100.0	%		75,000		607,000		8.09		3.2		5,525,600		-0-
86	FedEx Corporation	Schaumburg (Chicago)	IL	1997		100.0	%		73,500		478,000		6.50		8.5		5,177,940		-0-
87	FedEx Corporation	Romulus (Detroit)	MI	1998		100.0	%		71,933		370,000		5.14		2.7		4,732,671		-0-
88	FedEx Ground Package System, Inc.	Denver	CO	2005		100.0	%		69,865		605,000		8.66		7.1		6,354,051		414,050
89	Tampa Bay Grand Prix	Tampa	FL	2005		100.0	%		68,385		297,000		4.34		2.0		5,677,982		-0-
90	Sherwin-Williams Company	Rockford	IL	2011		100.0	%		66,387		481,000		7.25		5.3		5,551,227		-0-
91	Various Tenants at Retail Shopping Center	Somerset	NJ	1970		100.0	%		64,220		807,000		12.57		na		3,111,777		-0-
92	The American Bottling Company (Keurig Dr Pepper)	Cincinnati	OH	2015		100.0	%		63,840		481,000		7.53		11.0		6,750,000		-0-
93	FedEx Corporation	Chattanooga	TN	2007		100.0	%		60,637		319,000		5.26		4.1		5,138,540		-0-
94	SOFIVE, Inc.	Carlstadt (New York, NY)	NJ	2001		100.0	%		60,400		558,000		9.24		6.3		4,942,402		1,580,180
95	FedEx Ground Package System, Inc.	Stewartville (Rochester)	MN	2013		100.0	%		60,398		372,000		6.16		4.7		5,220,000		2,115,962
96	Carrier Enterprise, LLC (United Technologies)	Richmond	VA	2004		100.0	%		60,000		324,000		5.40		0.2		4,768,309		-0-
97	FedEx Ground Package System, Inc.	Augusta	GA	2005		100.0	%		59,358		501,000		8.44		2.8		5,363,305		338,789
98	Kellogg Sales Company	Newington (Hartford)	CT	2001		100.0	%		54,812		329,000		6.00		1.4		3,494,108		-0-
99	Siemens Real Estate	Lebanon (Cincinnati)	OH	2012		100.0	%		51,130		464,000		9.07		5.6		4,452,425		-0-
100	FedEx Corporation	Charlottesville	VA	1999		100.0	%		48,064		329,000		6.85		8.9		4,455,701		-0-

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  21 

Property Table

(unaudited)

				Fiscal Year				Square		Annual		Rent Per sf		Lease Exp. Term in		Undepreciated			Mortgage
No	Tenant	City (MSA)	State	Acquisition	Occup.			Footage		Rent		Occup.		Years		Cost			Balance
101	FedEx Ground Package System, Inc.	Corpus Christi	TX	2012		100.0	%		46,253	$	436,000	$	9.43		2.9	$	4,808,329		$	-0-
102	The American Bottling Company (Keurig Dr Pepper)	Tulsa	OK	2014		100.0	%		46,240		262,000		5.67		5.4		3,748,031			1,685,288
103	Heartland Coca-Cola Bottling Company, LLC (Coca-Cola)	Topeka	KS	2009		100.0	%		40,000		332,000		8.30		3.0		3,679,843			860,364
104	Collins Aerospace Systems (United Technologies)	Rockford	IL	2015		100.0	%		38,833		364,000		9.37		8.8		5,100,000			-0-
105	Foundation Building Materials, LLC	Urbandale (Des Moines)	IA	1994		100.0	%		36,270		172,000		4.74		9.3		2,523,644			-0-
106	FedEx Corporation	Richland (Jackson)	MS	1994		100.0	%		36,000		120,000		3.33		5.5		1,900,691			-0-
107	FedEx Corporation	Punta Gorda	FL	2007		100.0	%		34,624		284,000		8.20		8.8		4,133,510			-0-
108	FedEx Corporation	Lakeland	FL	2006		100.0	%		32,105		155,000		4.83		9.2		2,043,226			-0-
109	FedEx Corporation	Augusta	GA	2006		100.0	%		30,184		121,000		4.01		4.2		1,977,779			-0-
110	Graybar Electric Company	Ridgeland (Jackson)	MS	1993		100.0	%		26,340		109,000		4.14		0.8		1,885,254			-0-
111	Sherwin-Williams Company	Burr Ridge (Chicago)	IL	1997		100.0	%		12,500		162,000		12.96		3.1		1,692,901			-0-
	Total as of 9/30/18					99.6	%		21,173,581	$	126,792,000	$	6.01		8.1	$	1,719,567,354	(A)	$	719,768,355
	Acquisitons Subsequent to 9/30/18
112	FedEx Ground Package System, Inc.	Trenton	NJ	2019		100.0	%		347,145		5,328,000		15.35		13.8
	Pro Forma Total with Acquisitons Subsequent to 9/30/18					99.6	%		21,520,726	$	132,120,000	$	6.16		8.2

(A) Does not include unamortized debt issuance costs of $8,222,706.

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  22 

Definitions

Investors and analysts following the real estate industry utilize funds from operations (“FFO”), core funds from operations (“Core FFO”), adjusted funds from operations (“AFFO”), net operating income (“NOI”), Same Property NOI, Same Property Cash NOI, and earnings before interest, taxes, depreciation and amortization for real estate, (“EBITDAre”)& (“Adjusted EBITDA”) variously defined, as supplemental performance measures. While we believe net income available to common stockholders, as defined by accounting principles generally accepted in the United States of America (U.S. GAAP), is the most appropriate measure, we consider NOI, Same Property NOI, Same Property Cash NOI, EBITDAre, Adjusted EBITDA, FFO, Core FFO and AFFO, given their wide use by and relevance to investors and analysts, appropriate supplemental performance measures. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of U.S. GAAP depreciation and amortization of real estate assets. Core FFO reflects the same assumptions as FFO except that it also adjusts to exclude for the effects of acquisition costs and costs associated with the redemption of preferred stock. NOI provides a measure of rental operations, and does not factor in depreciation and amortization and non-property specific expenses such as interest expense and general and administrative expenses. EBITDAre and Adjusted EBITDA provides a tool to further evaluate the ability to incur and service debt and to fund dividends and other cash needs. AFFO provides a supplemental tool to evaluate our performance. In addition, NOI, Same Property NOI, Same Property Cash NOI, EBITDAre, Adjusted EBITDA, FFO, Core FFO and AFFO are commonly used in various ratios, pricing multiples, yields and returns and valuation of calculations used to measure financial position, performance and value. As used herein, we calculate the following non-U.S. GAAP measures as follows:

● FFO, as defined by The National Association of Real Estate Investment Trusts (NAREIT), to be equal to net income applicable to common shareholders, as defined by U.S. GAAP, excluding extraordinary items as defined by U.S. GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization. FFO includes gains and losses realized on sale of securities investments. NAREIT created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance and is used by industry analysts and investors as a supplemental operating performance measure of a REIT.

● Core FFO is calculated as FFO plus acquisition costs and costs associated with the redemption of preferred stock.

● AFFOis calculated as Core FFO, excluding lease termination income, net gain or loss on sale of securities transactions, stock based compensation expense, depreciation of corporate office tenant improvements, amortization of deferred financing costs, non-recurring other expense, non-cash U.S. GAAP straight-line rent adjustments and less recurring capital expenditures. Recurring capital expenditures are defined as all capital expenditures that are recurring in nature, excluding capital expenditures related to expansions at our current locations or capital expenditures that are incurred in conjunction with obtaining a new lease or a lease renewal.

● NOIfrom property operations is calculated as net income attributable to common shareholders, as defined by U.S. GAAP, plus redemption of preferred stock, preferred dividends, general & administrative expenses, acquisitions costs, depreciation, amortization of capitalized lease costs & intangible assets and interest expense, including amortization of financing costs, less dividend and interest income, gain on sale of securities transactions, gain on sale of real estate investments, and lease termination income. The components of NOI consist of recurring rental and reimbursement revenue, less real estate taxes and operating expenses, such as insurance, utilities, and repairs and maintenance and other operating expenses.

● Same Property NOIis calculated as the NOI of all properties owned during the entire periods presented with the exclusion of any properties expanded during the periods presented.

● Same Property Cash NOIis calculated as the Same Property NOI adjusted to exclude the effect of non-cash U.S. GAAP straight-line rent adjustment for the properties included in the Same Property NOI calculation.

● EBITDAre, as defined by NAREIT, is net income attributable to common shareholders, as defined by U.S. GAAP, plus preferred dividends, costs associated with the redemption of preferred stock, interest expense, including amortization of financing costs, depreciation and amortization, and plus losses (minus gains) on sales of real estate investments.

● Adjusted EBITDA is calculated as EBITDAreplus acquisition costs, net amortization of acquired above and below market lease revenue, and plus losses (minus gains) on sale of securities transactions.

FFO, Core FFO, AFFO, NOI, Same Property NOI, Same Property Cash NOI, EBITDAre and Adjusted EBITDA,do not represent cash generated from operating activities in accordance with U.S. GAAP and are not necessarily indicative of cash available to fund cash needs, including the repayment of principal on debt and payment of dividends and distributions. FFO, Core FFO, AFFO, NOI, Same Property NOI, Same Property Cash NOI, EBITDAre and Adjusted EBITDA should not be considered as substitutes for net income applicable to common shareholders (calculated in accordance with U.S. GAAP) as a measure of results of operations or cash flows (calculated in accordance with U.S. GAAP) as a measure of liquidity. FFO, Core FFO, AFFO, NOI, Same Property NOI, Same Property Cash NOI, EBITDAre and Adjusted EBITDA, as currently calculated by us, may not be comparable to similarly titled, but variously calculated, measures of other REITs.

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  23 

FOR IMMEDIATE RELEASE	November 28, 2018
	Contact: Susan Jordan
	732-577-9996

MONMOUTH REAL ESTATE REPORTS RESULTS FOR

THE FISCAL YEAR ENDED AND THE FOURTH QUARTER ENDED SEPTEMBER 30, 2018

FREEHOLD, NJ, November 28, 2018........ Monmouth Real Estate Investment Corporation (NYSE:MNR) reported Net Income Attributable to Common Shareholders of $38,815,000 or $0.49 per diluted share for the fiscal year ended September 30, 2018 as compared to $22,942,000 or $0.32 per diluted share for the fiscal year ended September 30, 2017, representing an increase in Net Income Attributable to Common Shareholders per share of 53.1%. The increase in Net Income Attributable to Common Shareholders was mostly attributable to the $18,541,000 increase in Net Operating Income (NOI). Funds From Operations (FFO) were $69,842,000 or $0.89 per diluted share for the fiscal year ended September 30, 2018 as compared to $54,443,000 or $0.75 per diluted share for the fiscal year ended September 30, 2017, representing an increase in FFO per share of 18.7%. Core Funds from Operations (Core FFO) were $69,842,000 or $0.89 per diluted share for the fiscal year ended September 30, 2018 as compared to $57,088,000 or $0.79 per diluted share for the fiscal year ended September 30, 2017, representing an increase in Core FFO per share of 12.7%. Adjusted Funds from Operations (AFFO), for the fiscal year ended September 30, 2018 were $68,375,000 or $0.87 per diluted share versus $54,880,000 or $0.76 per diluted share for the fiscal year ended September 30, 2017, representing an increase in AFFO per share of 14.5%.

Net Income Attributable to Common Shareholders for the three months ended September 30, 2018 was $7,782,000 or $0.10 per diluted share as compared to $6,726,000 or $0.09 per diluted share for the three months ended September 30, 2017, representing an increase in Net Income Attributable to Common Shareholders per share of 11.1%. FFO and Core FFO were $18,090,000 or $0.22 per diluted share for the three months ended September 30, 2018 as compared to $15,395,000 or $0.21 per diluted share for the three months ended September 30, 2017, representing an increase in FFO per share and Core FFO per share of 4.8%. AFFO for the three months ended September 30, 2018 was $17,708,000 or $0.22 per diluted share versus $15,470,000 or $0.21 per diluted share for the three months ended September 30, 2017, representing an increase in AFFO per share of 4.8%.

A summary of significant financial information for the three and twelve months ended September 30, 2018 and 2017 is as follows:

	Three Months Ended September 30,
	2018		2017
Rental Revenue	$	30,306,000	$	26,368,000
Reimbursement Revenue	$	6,295,000	$	4,789,000
Net Operating Income (NOI) (1)	$	30,174,000	$	26,047,000
Total Expenses	$	19,472,000	$	16,294,000
Dividend and Interest Income	$	3,740,000	$	2,300,000
Gain on Sale of Securities Transactions	$	-0-	$	18,000
Net Income	$	12,160,000	$	10,262,000
Net Income Attributable to Common Shareholders	$	7,782,000	$	6,726,000
Net Income Attributable to Common Shareholders Per Diluted Common Share	$	0.10	$	0.09
FFO (1)	$	18,090,000	$	15,395,000
FFO per Diluted Common Share (1)	$	0.22	$	0.21
Core FFO (1)	$	18,090,000	$	15,395,000
Core FFO per Diluted Common Share (1)	$	0.22	$	0.21
AFFO (1)	$	17,708,000	$	15,470,000
AFFO per Diluted Common Share (1)	$	0.22	$	0.21
Dividends Declared per Common Share	$	0.17	$	0.16
Weighted Avg. Diluted Common Shares Outstanding		80,889,000		74,800,000

	Twelve Months Ended September 30,
	2018		2017
Rental Revenue	$	115,864,000	$	97,660,000
Reimbursement Revenue	$	23,298,000	$	18,726,000
Lease Termination Income	$	210,000	$	-0-
Net Operating Income (NOI) (1)	$	114,772,000	$	96,231,000
Total Expenses	$	71,734,000	$	59,602,000
Dividend and Interest Income	$	13,120,000	$	6,931,000
Gain on Sale of Securities Transactions	$	111,000	$	2,312,000
Gain on Sale of Real Estate Investments	$	7,485,000	$	-0-
Net Income	$	56,006,000	$	40,271,000
Net Income Attributable to Common Shareholders	$	38,815,000	$	22,942,000
Net Income Attributable to Common Shareholders Per Diluted Common Share	$	0.49	$	0.32
FFO (1)	$	69,842,000	$	54,443,000
FFO per Diluted Common Share (1)	$	0.89	$	0.75
Core FFO (1)	$	69,842,000	$	57,088,000
Core FFO per Diluted Common Share (1)	$	0.89	$	0.79
AFFO (1)	$	68,375,000	$	54,880,000
AFFO per Diluted Common Share (1)	$	0.87	$	0.76
Dividends Declared per Common Share	$	0.68	$	0.64
Weighted Avg. Diluted Common Shares Outstanding		78,802,000		72,250,000

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  24 

A summary of significant balance sheet information as of September 30, 2018 and 2017 is as follows:

	September 30, 2018		September 30, 2017
Net Real Estate Investments	$	1,512,513,000	$	1,260,830,000
Securities Available for Sale at Fair Value	$	154,921,000	$	123,765,000
Total Assets	$	1,718,378,000	$	1,443,038,000
Fixed Rate Mortgage Notes Payable, net of Unamortized Debt Issuance Costs	$	711,546,000	$	591,364,000
Loans Payable	$	186,609,000	$	120,091,000
Total Shareholders’ Equity	$	797,906,000	$	712,866,000

Michael P. Landy, President and CEO, commented on the results for the fiscal year 2018,

“Fiscal 2018 was a very productive year for Monmouth. We executed exceptionally well and our achievements were many. During the year, we accomplished the following:

Solid Financial Results

● Generated 53% per share growth in Net Income Attributable to Common Shareholders

● Increased our per share FFO to $0.89, representing an 18.7% increase over the prior year

● Increased our per share AFFO to $0.87, representing a 14.5% increase over the prior year

● Increased our Gross Revenue by 23.5% to $152.3 million

● Increased our Net Operating Income by 19.3% to $114.8 million

● Increased our common stock dividend by 6.3% on October 2, 2017, representing our second dividend increase in three years

Strong Growth Record and Solid Pipeline

● Acquired 2.7 million square feet of high-quality industrial space for $282.3 million, generating $17.4 million in rental revenue, comprising seven brand new Class A, built-to-suit properties, all leased long-term, of which 85% is leased to investment-grade tenants

● Completed two expansions totaling $3.5 million, generating $367,000 in additional rental revenue, and resulting in 10-year lease extensions for both properties

● Increased our gross leasable area (GLA) by 12.7% year-over-year, to 21.2 million square feet

● Entered into commitments to acquire three new build-to-suit properties containing approximately 745,000 total square feet for a total cost of $154.0 million, of which one 347,145 square foot property was acquired for $85.2 million subsequent to fiscal yearend

Strong Portfolio Performance

● Renewed 11 of the 16 leases scheduled to expire in fiscal 2018, including one short term renewal

● Renewed 10 leases comprising 972,000 square feet for a weighted-average lease term of 6.8 years and resulting in an increase in the weighted-average lease rate of 4.1% on a U.S. GAAP straight-line basis and a 2.8% increase on a cash basis

● Sold four properties generating a realized gain of $7.5 million on a GAAP basis, and a $1.2 million gain over our original undepreciated cost

● Increased our sector-leading occupancy rate by 30 basis points to 99.6% as of the current fiscal yearend, up from 99.3% as of the prior fiscal yearend, representing our third consecutive year with above 99% occupancy

● Extended our weighted average lease maturity to 8.1 years as of the current fiscal yearend from 7.9 years as of the prior fiscal yearend

Compelling Returns and Strengthened Capitalization

● Achieved an 8% total shareholder return for fiscal 2018, versus a 4% total return for the MSCI US REIT Index during the same period

● Achieved $2.5 billion in total market capitalization as of September 30, 2018, representing a 17% increase over the prior year

● Raised $90.0 million in equity through our Dividend Reinvestment and Stock Purchase Plan

● Raised $40.1 million in net proceeds through our 6.125% Series C Perpetual Preferred Stock ATM Program

● Extended the weighted-average debt maturity on our fixed-rate debt to 11.7 years

● Reduced the weighted-average interest rate on our fixed-rate debt to 4.1% from 4.2%

● Reduced our General and Administrative expenses as a percentage of gross revenue by 8% to 5.8% for fiscal year 2018, and as a percentage of undepreciated assets by 4% to 46 basis points.”

FOURTH QUARTER AND FISCAL YEAR END 2018 SUPPLEMENTAL INFORMATION  25 

Mr. Landy stated, “On behalf of the hard-working team at Monmouth, I am happy to report these excellent results. The above metrics reflect a strong Company that has continued to enhance its position over the year. Our business model of investing in well-located, modern industrial buildings, leased primarily to investment-grade tenants, has provided our shareholders with reliable returns throughout the business cycle. The high-quality of our portfolio is evidenced by our sector-leading 99.6% occupancy rate.”

“During fiscal 2018, we grew our gross leasable area (GLA) by 13% through the acquisition of seven brand-new Class A, built-to-suit properties for an aggregate cost of $282.3 million. We also completed two property expansions which resulted in 10-year lease extensions for both properties. Approximately 80% of our total rental revenue is generated from investment-grade tenants with the remaining 20% secured by very strong unrated companies. Our property portfolio has a weighted-average building age of 8.7 years, and a weighted-average lease maturity of 8.1 years. We have assembled a modern industrial portfolio that contains large amounts of excess land to accommodate future growth. These are highly-automated industrial assets that are mission-critical to our tenants’ operations.”

“During the fiscal year, we raised $90 million in equity capital through our Dividend Reinvestment and Stock Purchase Plan. Of this amount, a total of $12.9 million in dividends was reinvested, representing a 24% participation rate. We also sold 1.65 million shares of our 6.125% Series C preferred stock through our ATM program generating net proceeds of $40.1 million. Subsequent to fiscal yearend, in October, we completed our first common stock offering since 2014, with the sale of 9.2 million shares that generated net proceeds of $132.3 million. Looking ahead, Monmouth is very well capitalized to continue to execute our qualitative growth strategy.”

“Subsequent to fiscal yearend, we also acquired a newly constructed built-to-suit property containing 347,000 square feet for $85.2 million. This brings our current portfolio to a total of 112 properties containing 21.5 million square feet, geographically diversified across 30 states. Our acquisition pipeline now comprises two brand new build-to-suit, industrial buildings that are currently being developed in Georgia and North Carolina. These two pipeline transactions total approximately 398,000 square feet for an aggregate purchase price of $68.7 million, and are scheduled to close during the first quarter of fiscal 2019 and the first half of fiscal 2020.”

“At the turn of the century, we anticipated that with the widespread growth of ecommerce, our property type would gain market share from the retail sector. Today, demand for industrial assets has never been stronger. We are now in our fourth consecutive year with an occupancy rate above 99%. Fiscal 2019 is poised to be another successful year at Monmouth. We look forward to reporting on our progress throughout the year.”

Monmouth Real Estate Investment Corporation will host its Fourth Quarter and FY 2018 Financial Results Webcast and Conference Call on Thursday, November 29, 2018 at 10:00 a.m. Eastern Time. Senior management will discuss the results, current market conditions and future outlook.

Our Fourth Quarter and FY 2018 financial results being released herein will be available on our website atwww.mreic.reit in the Investor Relations section, under Filings and Reports.

To participate in theWebcast, select the4Q2018 and Fiscal Yearend Webcast and Earnings Call “Link to Webcast” on the homepage of our website atwww.mreic.reit, in the Highlights section, which is located towards the bottom of the homepage. Interested parties can also participate viaconference call by calling toll free 1-877-510-5852 (domestically) or 1-412-902-4138 (internationally).

The replay of the conference call will be available at 12:00 p.m. Eastern Time on Thursday, November 29, 2018. It will be available until February 1, 2019, and can be accessed by dialing toll free 1-877-344-7529 (domestically) and 1-412-317-0088 (internationally) and entering the passcode 10123229. A transcript of the call and the webcast replay will be available at our website on the Investor Relations homepage,www.mreic.reit.

Monmouth Real Estate Investment Corporation, founded in 1968, is one of the oldest public equity REITs in the world. We specialize in single tenant, net-leased industrial properties, subject to long-term leases, primarily to investment-grade tenants. Monmouth Real Estate is a fully integrated and self-managed real estate company, whose property portfolio consists of 112 properties containing a total of approximately 21.5 million rentable square feet, geographically diversified across 30 states. In addition, we own a portfolio of REIT securities.

Certain statements included in this press release which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are based on our current expectations and involve various risks and uncertainties. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can provide no assurance those expectations will be achieved. The risks and uncertainties that could cause actual results or events to differ materially from expectations are contained in our annual report on Form 10-K and described from time to time in our other filings with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

Notes:

(1) Non-U.S. GAAP Information: FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as net income applicable to common shareholders, excluding gains or losses from sales of depreciable assets, plus real estate-related depreciation and amortization. We define Core FFO as FFO plus acquisition costs and costs associated with the redemption of preferred stock. We define AFFO as Core FFO, excluding lease termination income, net gain or loss on sale of securities transactions, stock based compensation expense, depreciation of corporate office tenant improvements, amortization of deferred financing costs, non-recurring other expense, non-cash U.S. GAAP straight-line rent adjustments and less recurring capital expenditures. We define recurring capital expenditures as all capital expenditures that are recurring in nature, excluding capital expenditures related to expansions at our current locations or capital expenditures that are incurred in conjunction with obtaining a new lease or a lease renewal. We define NOI as recurring rental and reimbursement revenues less real estate taxes and other operating expenses. FFO, Core FFO and AFFO per diluted common share are defined as FFO, Core FFO and AFFO divided by weighted average diluted common shares outstanding. FFO, Core FFO and AFFO per diluted common share, as well as NOI, should be considered as supplemental measures of operating performance used by real estate investment trusts (REITs). FFO, Core FFO and AFFO per diluted common share exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have different cost basis. However, other REITs may use different methodologies to calculate FFO, Core FFO and AFFO and, accordingly, our FFO, Core FFO and AFFO may not be comparable to all other REITs. The items excluded from FFO, Core FFO and AFFO per diluted common share are significant components in understanding our financial performance.

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FFO, Core FFO and AFFO per diluted common share (A) do not represent cash flow from operations as defined by accounting principles generally accepted in the United States of America; (B) should not be considered as an alternative to net income as a measure of operating performance or to cash flows from operating, investing and financing activities; and (C) are not alternatives to cash flow as a measure of liquidity. FFO, Core FFO and AFFO per diluted common share, as well as NOI, as calculated by us, may not be comparable to similarly titled measures reported by other REITs.

The following is a reconciliation of our U.S. GAAP Net Income to our FFO, Core FFO and AFFO for the three and twelve months ended September 30, 2018 and 2017:

	Three Months Ended						Twelve Months Ended
	9/30/2018			9/30/2017			9/30/2018			9/30/2017
Net Income Attributable to Common Shareholders	$	7,782,000		$	6,726,000		$	38,815,000		$	22,942,000
Plus: Depreciation Expense (excluding Corporate Office Capitalized Costs)		9,632,000			8,146,000			36,018,000			29,479,000
Plus: Amortization of Intangible Assets		455,000			301,000			1,614,000			1,072,000
Plus: Amortization of Capitalized Lease Costs		221,000			222,000			880,000			855,000
Less: (Gain) / Plus: Loss on Sale of Real Estate Investments		-0-			-0-			(7,485,000	)		95,000
FFO Attributable to Common Shareholders		18,090,000			15,395,000			69,842,000			54,443,000
Plus: Acquisition Costs		-0-			-0-			-0-			178,000
Plus: Redemption of Preferred Stock		-0-			-0-			-0-			2,467,000
Core FFO Attributable to Common Shareholders		18,090,000			15,395,000			69,842,000			57,088,000
Plus: Stock Compensation Expense		95,000			184,000			434,000			625,000
Plus: Depreciation of Corporate Office Capitalized Costs		39,000			39,000			158,000			157,000
Plus: Amortization of Financing Costs		310,000			285,000			1,220,000			1,234,000
Less: Lease Termination Income		-0-			-0-			(210,000	)		-0-
Less: Gain on Sale of Securities Transactions		-0-			(18,000	)		(111,000	)		(2,312,000	)
Less: Effect of Non-cash U.S. GAAP Straight-line Rent Adjustment		(615,000	)		(103,000	)		(1,973,000	)		(1,028,000	)
Less: Recurring Capital Expenditures		(211,000	)		(312,000	)		(985,000	)		(884,000	)
AFFO Attributable to Common Shareholders	$	17,708,000		$	15,470,000		$	68,375,000		$	54,880,000

The following are the Cash Flows provided (used) by Operating, Investing and Financing Activities for the twelve months ended September 30, 2018 and 2017:

	Twelve Months Ended
	9/30/2018			9/30/2017
Operating Activities	$	85,529,000		$	73,868,000
Investing Activities		(332,513,000	)		(339,071,000	)
Financing Activities		246,083,000			179,680,000

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