(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 lease for the Best Buy store was extended to expire on January 19, 2023. 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 building in Wichita, Kansas 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 Fresenius Medical Center was constructed in 2012 and acquired in 2014. The Zales store was constructed in 1983, renovated in 2014 and acquired in 2015. The Dollar Tree store was constructed in 2015 and acquired in 2016. There have been no costs capitalized as improvements subsequent to the acquisitions, except for $30,000 of tenant improvements related to the Cellular Connection store.

The cost of the properties not held for sale and related accumulated depreciation at December 31, 2017 are as follows:


Property	Land		Buildings		Total		Accumulated Depreciation

Biomat USA Plasma Center, Wichita, KS	$	507,489	$	1,277,436	$	1,784,925	$	683,949
Advance Auto Parts, Middletown, OH		112,315		909,974		1,022,289		421,624
Applebee’s, Crawfordsville, IN		337,353		900,418		1,237,771		396,185
Cellular Connection, Bluffton, IN		344,008		836,108		1,180,116		335,896
Best Buy, Eau Claire, WI		474,137		1,547,025		2,021,162		613,651
Dick’s Sporting Goods, Fredericksburg, VA		1,603,559		1,523,044		3,126,603		633,802
Fresenius Medical Center, Chicago, IL		464,400		665,142		1,129,542		79,814
Zales, Enid, OK		440,000		903,630		1,343,630		100,903
Dollar Tree, West Point, MS		270,000		1,316,232		1,586,232		100,910
	$	4,553,261	$	9,879,009	$	14,432,270	$	3,366,734

For the years ended December 31, 2017 and 2016, the Company recognized depreciation expense of $396,640 and $390,890, respectively.

On February 3, 2016, the Company purchased a Dollar Tree store in West Point, Mississippi for $1,535,714. The Company allocated $232,977 of the purchase price to Acquired Intangible Lease Assets, representing in-place lease intangibles, and allocated $283,495 to Acquired Below-Market Lease Intangibles. The Company incurred $55,479 of acquisition expenses related to the purchase that were expensed. The property is leased to Dollar Tree Stores, Inc. under a lease agreement with a remaining primary term of 9.7 years (as of the date of purchase) and annual rent of $107,500.

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


		2017				2016
		Cost		Accumulated Amortization		Cost		Accumulated Amortization
In-Place Lease Intangibles (weighted average life of 97 and 107 months, respectively)	$	633,712	$	136,879	$	579,419	$	80,199

Above-Market Lease Intangibles (weighted average life of 82 and 94 months, respectively)		72,606		20,834		72,606		13,258
Acquired Intangible Lease Assets	$	706,318	$	157,713	$	652,025	$	93,457

Acquired Below-Market Lease Intangibles (weighted average life of 93 and 105 months, respectively)	$	283,495	$	54,236	$	283,495	$	24,652

For the years ended December 31, 2017 and 2016, the value of in-place lease intangibles amortized to expense was $56,680 and $52,627, the decrease to rental income for above-market leases was $7,576 and $7,576, and the increase to rental income for below-market leases was $29,584 and $24,652, respectively. For the year ended December 31, 2018, the estimated amortization expense is $59,621. Beginning with the year ended December 31, 2019, the estimated amortization expense is $62,108 for each of the next four years. For lease intangibles not held for sale as of December 31, 2017, the estimated decrease to rental income for above-market leases is $7,576 and the estimated increase to rental income for below-market leases is $29,584 for each of the next five succeeding years.

The Company owns a 40% interest in the 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, 2017, the tenant owed $19,366 of past due rent, which was not accrued for financial reporting purposes. The owners listed the property for lease with a real estate broker in the Wichita area. While the property is vacant, the Company is responsible for its 40% share of real estate taxes and other costs associated with maintaining the property. The annual rent from this property represented approximately 19% of the total annual rent of the Company’s property portfolio. The loss of rent and increased expenses related to this property decreased the Company’s cash flow. Consequently, beginning with the third quarter of 2016, the Company reduced its regular quarterly cash distribution rate from $0.1313 per Unit to $0.0946 per Unit.

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 will operate a Biomat USA Plasma Center in the space. The Company’s 40% share of annual rent is $37,071 and is expected to commence on June 18, 2018. Biomat has 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. The Company will be responsible for paying its 40% share of the remaining cost to replace the roof, which is expected to be approximately $113,000. At December 31, 2017, the Company accrued its 40% share of lease commissions due to real estate brokers totaling $54,293 that were owed as part of the lease transaction. This amount was capitalized and will be amortized over the term of the lease. The Company is continuing to pursue additional tenants for the remaining space.

On March 31, 2017, the lease term expired for the Starbucks store in Bluffton, Indiana. Effective April 1, 2017, the Company entered into a lease agreement with a primary term of six years with The Cellular Connection LLC, a cell phone retailer that was subleasing the property from Starbucks Corporation. The tenant is scheduled to pay annual rent of $39,156 during the base lease term. As part of the lease transaction, the Company paid a tenant improvement allowance of $30,000 that was capitalized and will be depreciated.

For properties owned as of December 31, 2017, the minimum future rent payments required by the leases are as follows:

2018	$	939,273
2019		714,365
2020		660,206
2021		664,649
2022		673,024
Thereafter		1,632,675
	$	5,284,192

There were no contingent rents recognized in 2017 and 2016.