Investments in Real Estate

12 Months Ended

Dec. 31, 2011

Investments in Real Estate [Abstract]

Investments in Real Estate

(4)  Investments in Real Estate –

The Partnership leases its properties to various tenants under net leases, classified as operating leases.  Under a net lease, the tenant is responsible for real estate taxes, insurance, maintenance, repairs and operating expenses for the property.  For some leases, the Partnership is responsible for repairs to the structural components of the building, the roof, and the parking lot.  At the time the properties were acquired, the remaining primary lease terms varied from 10 to 20 years, except for the Staples store, which had a remaining primary term of 8.4 years.  The leases provide the tenants with two to four five-year renewal options subject to the same terms and conditions as the primary term.

The Partnership's properties are commercial, single-tenant buildings.  The TGI Friday’s restaurant was constructed and acquired in 1997.  The KinderCare daycare center in Pearland, Texas was constructed in 1997 and acquired in 1999.  The KinderCare daycare center in Golden, Colorado was constructed and acquired in 2000.  The KinderCare daycare center in Plainfield, Illinois was constructed and acquired in 2001.  The Johnny Carino’s restaurant was constructed in 1999 and acquired in 2003.  The Jared Jewelry store was constructed in 2001 and acquired in 2004.  The Applebee’s restaurants were constructed in 1996 and acquired in 2006.  The Advance Auto Parts store was constructed in 2005 and acquired in 2006.  The Tractor Supply Company store was constructed in 2005 and acquired in 2007.  The Best Buy store was constructed and acquired in 2008.  The Staples store was constructed in 2010 and acquired in 2011.  There have been no costs capitalized as improvements subsequent to the acquisitions.

The cost of the properties not held for sale and related accumulated depreciation at December 31, 2011 are as follows:

Property	Land		Buildings and Equipment		Total		Accumulated Depreciation
TGI Friday's, Greensburg, PA	$	6,439	$	8,141	$	14,580	$	4,642
KinderCare, Golden, CO		7,684		25,844		33,528		11,632
KinderCare, Plainfield, IL		1,313		3,332		4,645		1,414
Johnny Carino’s, Longmont, CO		560,383		733,022		1,293,405		234,568
Jared Jewelry, Sugar Land, TX		503,837		1,030,129		1,533,966		307,321
Applebee’s, Johnstown, PA		264,557		766,630		1,031,187		162,269
Advance Auto Parts,Indianapolis, IN		537,914		706,259		1,244,173		142,426
Applebee’s, Crawfordsville, IN		506,030		1,350,626		1,856,656		270,125
Tractor Supply, Grand Forks, ND		238,547		1,165,327		1,403,874		231,123
Best Buy, Lake Geneva, WI		335,142		1,687,104		2,022,246		216,511
Staples, Clermont, FL		239,400		540,935		780,335		4,508
	$	3,201,246	$	8,017,349	$	11,218,595	$	1,586,539

On October 21, 2011, the Partnership purchased a 28% interest in a Staples store in Clermont, Florida for $897,288.  The Partnership allocated $116,953 of the purchase price to Acquired Intangible Lease Assets and incurred $18,941 of acquisition expenses related to the purchase that were expensed.  The property is leased to Staples the Office Superstore East, Inc. under a Lease Agreement with a remaining primary term of 8.4 years (as of the date of purchase) and annual rent of $73,031 for the interest purchased.

On March 16, 2012, the Partnership purchased a 34% interest in a PetSmart store in Galveston, Texas for $824,500.  The property is leased to PetSmart, Inc. under a Lease Agreement with a remaining primary term of 10.0 years and annual rent of $65,560 for the interest purchased.

The cost of Acquired Intangible Lease Assets not held for sale and related accumulated amortization at December 31, 2011 are as follows:

		In-Place Lease		Accumulated Amortization
Acquired Intangibles (with a weighted average life of 101 months)	$	116,953	$	2,316

For the years ended December 31, 2011 and 2010, the amortization expense was $2,316 and $0, respectively.  For in-place leases owned as of December 31, 2011, the estimated amortization expense is $13,895 for each of the next five succeeding years.

At December 31, 2011, the Partnership owned a .8729% interest in a TGI Friday’s restaurant, a 1.9962% interest in a KinderCare daycare center in Golden, Colorado and a .3154% interest in a KinderCare daycare center in Plainfield, Illinois.  The remaining interests in these properties are owned by unrelated third parties, who own the properties with the Partnership as tenants-in-common.

For properties owned as of December 31, 2011, the minimum future rent payments required by the leases are as follows:

2012	$	961,059
2013		962,215
2014		925,784
2015		873,308
2016		888,022
Thereafter		4,432,654
	$	9,043,042

There were no contingent rents recognized in 2011 and 2010.