Real Estate Held for Investment

12 Months Ended

Dec. 31, 2012

Real Estate Disclosure [Text Block]

(4) Real Estate Held for Investment –

The Company 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 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 Indianapolis, Indiana was constructed in 1997 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. 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, 2012 are as follows:

Property	Land		Buildings and Equipment		Total		Accumulated Depreciation
Sports Authority, Wichita, KS	$	697,617	$	1,533,136	$	2,230,753	$	410,947
Advance Auto Parts, Middletown, OH		112,315		909,974		1,022,289		239,627
Applebee’s, Indianapolis, IN		889,340		2,164,847		3,054,187		538,362
Applebee’s, Crawfordsville, IN		337,353		900,418		1,237,771		216,102
Starbucks, Bluffton, IN		344,008		806,108		1,150,116		173,312
Best Buy, Eau Claire, WI		474,137		1,547,025		2,021,162		304,248
Dick’s Sporting Goods, Fredericksburg, VA		1,603,559		1,523,044		3,126,603		289,668
Tractor Supply, Starkville, MS		397,500		947,775		1,345,275		33,172
	$	4,855,829	$	10,332,327	$	15,188,156	$	2,205,438

For the years ended December 31, 2012 and 2011, the Company recognized depreciation expense for properties not held for sale of $416,459 and $375,383, respectively.

On February 23, 2012, the Company purchased a 53% interest in a Tractor Supply Company store in Starkville, Mississippi for $1,510,500. The Company allocated $257,767 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles, and allocated $92,542 to Acquired Below-Market Lease Intangibles. The Company incurred $28,135 of acquisition expenses related to the purchase that were expensed. The property is leased to Tractor Supply Company under a Lease Agreement with a remaining primary term of 15 years (as of the date of purchase) and annual rent of $115,542 for the interest purchased.

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

		2012				2011
		Cost		Accumulated Amortization		Cost		Accumulated Amortization
Acquired Intangible Lease Assets  (weighted average life of 169 and 0 months, respectively)	$	257,767	$	14,400	$	0	$	0
Acquired Below-Market Lease Intangibles  (weighted average life of 169 and 0 months, respectively)	$	92,542	$	5,170	$	0	$	0

For the years ended December 31, 2012 and 2011, the value of in-place lease intangibles amortized to expense was $14,400 and $0, respectively, and the increase to rental income for below-market leases was $5,170 and $0, respectively. For lease intangibles not held for sale at December 31, 2012, the estimated amortization expense for in-place lease intangibles is $17,280 and the estimated increase to rental income for below-market leases is $6,204 for each of the next five succeeding years.

For properties owned as of December 31, 2012, the minimum future rent payments required by the leases are as follows:

2013	$	1,201,318
2014		1,217,237
2015		1,222,352
2016		1,228,592
2017		1,004,456
Thereafter		4,867,089
	$	10,741,044

There were no contingent rents recognized in 2012 and 2011.