Real Estate Investments

3 Months Ended

Mar. 31, 2023

Real Estate [Abstract]

Real Estate Disclosure [Text Block]

(4)  Real Estate Investments –

The Company owned a 40% interest in a former Sports Authority store in Wichita, Kansas. On March 2, 2016, the tenant, TSA Stores, Inc., and its parent company, The Sports Authority, Inc., the guarantor of the lease, filed for Chapter 11 bankruptcy reorganization. In June 2016, the tenant filed a motion with the bankruptcy court to reject the lease for this store effective June 30, 2016, at which time the tenant returned possession of the property to the owners. As of December 31, 2020, the tenant owed $19,366 of past due rent, which was not recorded for financial reporting purposes. On March 23, 2021, a motion to dismiss the bankruptcy case was issued by a federal judge to The Sports Authority, Inc., the Company will therefore not be receiving any of the past due rent. The owners listed the property for lease with a real estate broker in the Wichita area. While the property was vacant, the Company was responsible for its 40% share of real estate taxes and other costs associated with maintaining the property.

On September 21, 2017, the Company entered into a lease agreement with a primary term of 10 years with Biomat USA, Inc. (“Biomat”) as a replacement tenant for 28% of the square footage of the property. The tenant operates a Biomat USA Plasma Center in the space. The Company’s 40% share of annual rent, which commenced on June 18, 2018, is $37,071. Biomat agreed to pay for the costs to divide the building into two separate spaces, the costs of tenant improvements to remodel the Biomat space and 28% of the cost to replace the roof.

On August 27, 2019, the Company entered into a lease agreement with a primary term of 10 years with BigTime Fun Center, LLC as a replacement tenant for 57% of the square footage of the property. The tenant was to operate an indoor sports entertainment center in the space. The Company’s 40% share of annual rent, which was to commence on February 23, 2020, was $78,000. As part of the agreement, the Company would pay a tenant improvement allowance of $64,000 when certain conditions were met by the tenant. Due to ongoing difficulties due to the COVID-19 Pandemic the Company was negotiating a rent commencement date of April 1, 2021. As a part of the negotiations the tenant improvement allowance was to be replaced with a ten month rent abatement starting April 1, 2021. Additionally, this agreement would forebear rent and additional charges for the period from February 23, 2020 to March 31, 2021. In September 2019, the Company paid $32,760 to a real estate broker for its 40% share of the lease commission due as part of the lease transaction. This amount was capitalized and was to be amortized over the term of the lease. On January 22, 2021 the owner of Big Time Fund Center, LLC informed the Company that it did not intend to open the Wichita property. As a result of the tenant informing the Company of their intention not to open, the full amount of the lease commission was amortized in the fourth quarter of 2020.

In September 2022, the Company entered into an agreement to sell its 40% interest in the Biomat Clinic in Wichita, Kansas to an unrelated third party. The property was classified as real estate held for sale at December 31, 2022. On February 9, 2023, the sale closed with the Company receiving net proceeds of $945,486, which resulted in a gain of $24,945. At the time of the sale, the cost and related accumulated depreciation and amortization was $1,871,978 and $951,437, respectively.

In January 2023, the Company entered into an agreement to sell its 54% interest in the Fresenius clinic in Chicago, Illinois to an unrelated third party. On May 8, 2023, the sale closed with the Company receiving net proceeds of approximately $1,677,402, which resulted in a net gain of approximately $707,000. At the time of the sale, the cost and related accumulated depreciation was $1,292,220 and $321,684, respectively. The property was classified as real estate held for sale on the balance sheet as of March 31, 2023.

In April 2022, the Company entered into an agreement with the tenant of the Fresenius Medical Care in Chicago, Illinois to extend the lease term five years to end on April 30, 2032. As part of the agreement, the annual rent will continue to increase annually at 2.5%.

In March 2023, the Company performed a long-lived asset valuation analysis and determined The Cellular Connection store in Bluffton, Indiana was impaired. As a result, in the first quarter of 2023, a charge to operations for real estate impairment of $132,000 was recognized, which was the difference between the carrying value at March 31, 2023 of approximately $640,000 and the estimated fair value of $508,000. The charge was recorded against the land and building in the amount of $38,280 and $93,720, respectively.

In May 2023, the Company entered into an agreement to sell its interest in The Cellular Connection store in Bluffton, Indiana to an unrelated third party. The sale is subject to contingencies and may not be completed.  If the sale is completed, the Company expects to receive net sale proceeds of approximately $508,000, which will result in no gain or loss.