Real Estate Investments

12 Months Ended

Dec. 31, 2014

Real Estate [Abstract]

Real Estate Disclosure [Text Block]

(4) Real Estate Investments –

The Company leases its properties to 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 Company 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. The leases provide the tenants with three to four five-year renewal options subject to the same terms and conditions as the primary term.

The Company's properties are commercial, single-tenant buildings. The Sports Authority store was constructed in 1996, renovated in 2001 and acquired in 2006. The Advance Auto Parts store was constructed in 2004 and acquired in 2006. The Applebee’s restaurant in Crawfordsville, Indiana was constructed in 1996 and acquired in 2006. The Starbucks restaurant was constructed and acquired in 2007. The Best Buy store was constructed in 1990, renovated in 1997 and acquired in 2008. The land for the Dick’s Sporting Goods store was acquired in 2007 and construction of the store was completed in 2008. The Tractor Supply Company store was constructed and acquired in 2012. The Fresenius Medical Center was constructed in 2012 and acquired in 2014. 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, 2014 are as follows:

Property	Land		Buildings		Total		Accumulated Depreciation
Sports Authority, Wichita, KS	$	697,617	$	1,533,136	$	2,230,753	$	533,599
Advance Auto Parts, Middletown, OH		112,315		909,974		1,022,289		312,425
Applebee’s, Crawfordsville, IN		337,353		900,418		1,237,771		288,136
Starbucks, Bluffton, IN		344,008		806,108		1,150,116		237,800
Best Buy, Eau Claire, WI		474,137		1,547,025		2,021,162		428,010
Dick’s Sporting Goods, Fredericksburg, VA		1,603,559		1,523,044		3,126,603		427,320
Tractor Supply, Starkville, MS		397,500		947,775		1,345,275		108,994
Fresenius Medical Center, Chicago, IL		464,400		665,142		1,129,542		0
	$	4,430,889	$	8,832,622	$	13,263,511	$	2,336,284

For the years ended December 31, 2014 and 2013, the Company recognized depreciation expense of $392,333 and $421,198, respectively.

On December 30, 2014, the Company purchased a 54% interest in a Fresenius Medical Center in Chicago, Illinois for $1,292,220. The Company allocated $162,678 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles. The Company incurred $37,042 of acquisition expenses related to the purchase that were expensed. The property is leased to Fresenius Medical Care Chatham, LLC, a subsidiary of Fresenius Medical Care Holdings, Inc., under a Lease Agreement with a remaining primary term of 12.3 years (as of the date of purchase) and annual rent of $87,228 for the interest purchased.

On March 17, 2015, the Company purchased a Zales store in Enid, Oklahoma for $1,600,000. The property is leased to Zale Delaware, Inc. under a Lease Agreement with a remaining primary term of 9.6 years and annual rent of $105,600.

The following schedule presents the cost and related accumulated amortization of acquired lease intangibles not held for sale at December 31:

		2014				2013
		Cost		Accumulated Amortization		Cost		Accumulated Amortization
Acquired Intangible Lease Assets  (in-place lease intangibles with a weighted average  life of 146 and 157 months, respectively)	$	420,445	$	48,960	$	257,767	$	31,680
Acquired Below-Market Lease Intangibles  (weighted average life of 145 and 157 months, respectively)	$	92,542	$	17,578	$	92,542	$	11,374

For the years ended December 31, 2014 and 2013, the value of in-place lease intangibles amortized to expense was $17,280 and the increase to rental income for below-market leases was $6,204 for each year. For lease intangibles not held for sale at December 31, 2014, the estimated amortization expense is $30,470 and the estimated increase to rental income is $6,204 for each of the next five succeeding years.

For properties owned as of December 31, 2014, the minimum future rent payments required by the leases are as follows:

2015	$	1,074,251
2016		1,078,268
2017		843,086
2018		645,205
2019		393,575
Thereafter		2,495,379
	$	6,529,764

There were no contingent rents recognized in 2014 and 2013.