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AEI Income & Growth Fund 26 LLC 10-K --12-31 1738006 0 false 0001326321 Yes No Smaller Reporting Company No 2017 FY 2017-12-31

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>(1)  Organization – </font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>AEI Income & Growth Fund 26 LLC (“Company”), a Limited Liability Company, was formed on March 14, 2005 to acquire and lease commercial properties to operating tenants.  The Company's operations are managed by AEI Fund Management XXI, Inc. (“AFM”), the Managing Member.  Robert P. Johnson, the President and sole director of AFM, serves as the Special Managing Member.  AFM is a wholly owned subsidiary of AEI Capital Corporation of which Mr. Johnson is the majority shareholder.  AEI Fund Management, Inc. (“AEI”), an affiliate of AFM, performs the administrative and operating functions for the Company.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The terms of the offering called for a subscription price of $10 per LLC Unit, payable on acceptance of the offer.  The Company commenced operations on April 3, 2006 when minimum subscriptions of 150,000 LLC Units ($1,500,000) were accepted.  The offering terminated October 19, 2007, when the extended offering period expired.  The Company received subscriptions for 1,832,736 Units.  Under the terms of the Operating Agreement, the Limited Members and Managing Members contributed funds of $18,327,360 and $1,000, respectively.  The Company shall continue until December 31, 2055, unless dissolved, terminated and liquidated prior to that date.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>During operations, any Net Cash Flow, as defined, which the Managing Members determine to distribute will be distributed 97% to the Limited Members and 3% to the Managing Members.  Distributions to Limited Members will be made pro rata by Units.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>Any Net Proceeds of Sale, as defined, from the sale or financing of properties which the Managing Members determine to distribute will, after provisions for debts and reserves, be paid in the following manner: (i) first, 99% to the Limited Members and 1% to the Managing Members until the Limited Members receive an amount equal to: (a) their Adjusted Capital Contribution plus (b) an amount equal to 6.5% of their Adjusted Capital Contribution per annum, cumulative but not compounded, to the extent not previously distributed from Net Cash Flow; (ii) any remaining balance will be distributed 90% to the Limited Members and 10% to the Managing Members.  Distributions to the Limited Members will be made pro rata by Units.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>For tax purposes, profits from operations, other than profits attributable to the sale, exchange, financing, refinancing or other disposition of property, will be allocated 97% to the Limited Members and 3% to the Managing Members.  Net losses from operations will be allocated 99% to the Limited Members and 1% to the Managing Members.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>For tax purposes, profits arising from the sale, financing, or other disposition of property will be allocated in accordance with the Operating Agreement as follows: (i) first, to those Members with deficit balances in their capital accounts in an amount equal to the sum of such deficit balances; (ii) second, 99% to the Limited Members and 1% to the Managing Members until the aggregate balance in the Limited Members' capital accounts equals the sum of the Limited Members' Adjusted Capital Contributions plus an amount equal to 6.5% of their Adjusted Capital Contributions per annum, cumulative but not compounded, to the extent not previously allocated; (iii) third, the balance of any remaining gain will then be allocated 90% to the Limited Members and 10% to the Managing Members.  Losses will be allocated 99% to the Limited Members and 1% to the Managing Members.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Managing Members are not required to currently fund a deficit capital balance.  Upon liquidation of the Company or withdrawal by a Managing Member, the Managing Members will contribute to the Company an amount equal to the lesser of the deficit balances in their capital accounts or 1.01% of the total capital contributions of the Limited Members over the amount previously contributed by the Managing Members.</font> </div><br/></div>

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During operations, any Net Cash Flow, as defined, which the Managing Members determine to distribute will be distributed 97% to the Limited Members and 3% to the Managing Members.  Distributions to Limited Members will be made pro rata by Units.Any Net Proceeds of Sale, as defined, from the sale or financing of properties which the Managing Members determine to distribute will, after provisions for debts and reserves, be paid in the following manner: (i) first, 99% to the Limited Members and 1% to the Managing Members until the Limited Members receive an amount equal to: (a) their Adjusted Capital Contribution plus (b) an amount equal to 6.5% of their Adjusted Capital Contribution per annum, cumulative but not compounded, to the extent not previously distributed from Net Cash Flow; (ii) any remaining balance will be distributed 90% to the Limited Members and 10% to the Managing Members.  Distributions to the Limited Members will be made pro rata by Units.

For tax purposes, profits from operations, other than profits attributable to the sale, exchange, financing, refinancing or other disposition of property, will be allocated 97% to the Limited Members and 3% to the Managing Members.  Net losses from operations will be allocated 99% to the Limited Members and 1% to the Managing Members.For tax purposes, profits arising from the sale, financing, or other disposition of property will be allocated in accordance with the Operating Agreement as follows: (i) first, to those Members with deficit balances in their capital accounts in an amount equal to the sum of such deficit balances; (ii) second, 99% to the Limited Members and 1% to the Managing Members until the aggregate balance in the Limited Members' capital accounts equals the sum of the Limited Members' Adjusted Capital Contributions plus an amount equal to 6.5% of their Adjusted Capital Contributions per annum, cumulative but not compounded, to the extent not previously allocated; (iii) third, the balance of any remaining gain will then be allocated 90% to the Limited Members and 10% to the Managing Members.  Losses will be allocated 99% to the Limited Members and 1% to the Managing Members.The Managing Members are not required to currently fund a deficit capital balance.  Upon liquidation of the Company or withdrawal by a Managing Member, the Managing Members will contribute to the Company an amount equal to the lesser of the deficit balances in their capital accounts or 1.01% of the total capital contributions of the Limited Members over the amount previously contributed by the Managing Members.

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>(2)  Summary of Significant Accounting Policies – </font> </div><br/><div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>Financial Statement Presentation</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The accounts of the Company are maintained on the accrual basis of accounting for both federal income tax purposes and financial reporting purposes.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>Accounting Estimates</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>Management uses estimates and assumptions in preparing these financial statements in accordance with United States Generally Accepted Accounting Principles (US GAAP).  Those estimates and assumptions may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.  Actual results could differ from those estimates.  Significant items, subject to such estimates and assumptions, include the carrying value of real estate held for investment, real estate held for sale and related intangible assets.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company regularly assesses whether market events and conditions indicate that it is reasonably possible to recover the carrying amounts of its investments in real estate from future operations and sales.  A change in those market events and conditions could have a material effect on the carrying amount of its real estate.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>Cash Concentrations of Credit Risk</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company's cash is deposited in one financial institution and at times during the year it may exceed FDIC insurance limits.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>Receivables </font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>Credit terms are extended to tenants in the normal course of business.  The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>Receivables are recorded at their estimated net realizable value.  The Company follows a policy of providing an allowance for doubtful accounts; however, based on historical experience, and its evaluation of the current status of receivables, the Company is of the belief that such accounts, if any, will be collectible in all material respects and thus an allowance is not necessary.  Accounts are considered past due if payment is not made on a timely basis in accordance with the Company’s credit terms.  Receivables considered uncollectible are written off.  </font> </div><br/><div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>Income Taxes</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The income or loss of the Company for federal income tax reporting purposes is includable in the income tax returns of the Members.  In general, no recognition has been given to income taxes in the accompanying financial statements.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The tax return and the amount of distributable Company income or loss are subject to examination by federal and state taxing authorities.  If such an examination results in changes to distributable Company income or loss, the taxable income of the members would be adjusted accordingly.  Primarily due to its tax status as a partnership, the Company has no significant tax uncertainties that require recognition or disclosure.  The Company is no longer subject to U.S. federal income tax examinations for tax years before 2014, and with few exceptions, is no longer subject to state tax examinations for tax years before 2014.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>Revenue Recognition</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company's real estate is leased under net leases, classified as operating leases.  The leases provide for base annual rental payments payable in monthly installments.  The Company recognizes rental income according to the terms of the individual leases.  For leases that contain stated rental increases, the increases are recognized in the year in which they are effective.  Contingent rental payments are recognized when the contingencies on which the payments are based are satisfied and the rental payments become due under the terms of the leases.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>Real Estate</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>Upon acquisition of real properties, the Company records them in the financial statements at cost.  The purchase price is allocated to tangible assets, consisting of land and building, and to identified intangible assets and liabilities, which may include the value of above market and below market leases and the value of in-place leases.  The allocation of the purchase price is based upon the fair value of each component of the property.  Although independent appraisals may be used to assist in the determination of fair value, in many cases these values will be based upon management’s assessment of each property, the selling prices of comparable properties and the discounted value of cash flows from the asset.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The fair values of above market and below market in-place leases will be recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) an estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the non-cancelable term of the lease including any bargain renewal periods.  The above market and below market lease values will be capitalized as intangible lease assets or liabilities.  Above market lease values will be amortized as an adjustment of rental income over the remaining term of the respective leases.  Below market lease values will be amortized as an adjustment of rental income over the remaining term of the respective leases, including any bargain renewal periods.  If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above market and below market in-place lease values relating to that lease would be recorded as an adjustment to rental income.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The fair values of in-place leases will include estimated direct costs associated with obtaining a new tenant, and opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease.  Direct costs associated with obtaining a new tenant may include commissions, tenant improvements, and other direct costs and are estimated, in part, by management’s consideration of current market costs to execute a similar lease.  These direct costs will be included in intangible lease assets on the balance sheet and will be amortized to expense over the remaining term of the respective leases.  The value of opportunity costs will be calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease.  These intangibles will be included in intangible lease assets on the balance sheet and will be amortized to expense over the remaining term of the respective leases.  If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed. </font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company tests real estate for recoverability when events or changes in circumstances indicate that the carrying value may not be recoverable.  For properties the Company will hold and operate, it compares the carrying amount of the property to the estimated probability-weighted future undiscounted cash flows expected to result from the property and its eventual disposition.  If the sum of the expected future cash flows is less than the carrying amount of the property, the Company recognizes an impairment loss by the amount by which the carrying amount of the property exceeds the fair value of the property.  For properties held for sale, the Company determines whether impairment has occurred by comparing the property’s estimated fair value less cost to sell to its current carrying value.  If the carrying value is greater than the net realizable value, an impairment loss is recorded to reduce the carrying value of the property to its net realizable value. </font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>For financial reporting purposes, the buildings owned by the Company are depreciated using the straight-line method over an estimated useful life of 25 years.  Intangible lease assets are amortized using the straight-line method for financial reporting purposes based on the remaining life of the lease.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The disposition of a property or classification of a property as Real Estate Held for Sale by the Company does not represent a strategic shift that will have a major effect on the Company’s operations and financial results.  Therefore, the results from operating and selling the property are included in continuing operations.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company accounts for properties owned as tenants-in-common with affiliated entities and/or unrelated third parties using the proportionate consolidation method.  Each tenant-in-common owns a separate, undivided interest in the properties.  Any tenant-in-common that holds more than a 50% interest does not control decisions over the other tenant-in-common interests.  The financial statements reflect only this Company's percentage share of the properties' land, building, liabilities, revenues and expenses.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company’s properties are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which the properties are located.  These laws could require the Company to investigate and remediate the effects of the release or disposal of hazardous materials at these locations if found.  For each property, an environmental assessment is completed prior to acquisition.  In addition, the lease agreements typically strictly prohibit the production, handling, or storage of hazardous materials (except where incidental to the tenant’s business such as use of cleaning supplies) in violation of applicable law to restrict environmental and other damage.  Environmental liabilities are recorded when it is determined the liability is probable and the costs can reasonably be estimated.  There were no environmental issues noted or liabilities recorded at December 31, 2017 and 2016.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>Fair Value Measurements</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>As of December 31, 2017 and 2016, the Company had no assets or liabilities measured at fair value on a recurring basis or nonrecurring basis.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>Income Per Unit</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>Income per LLC Unit is calculated based on the weighted average number of LLC Units outstanding during each period presented.  Diluted income per LLC Unit considers the effect of any potentially dilutive Unit equivalents, of which the Company had none for each of the years ended December 31, 2017 and 2016.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>Reportable Segments</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company invests in single tenant commercial properties throughout the United States that are net leased to tenants in various industries.  Because these net leased properties have similar economic characteristics, the Company evaluates operating performance on an overall portfolio basis.  Therefore, the Company’s properties are classified as one reportable segment.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>Recently Issued Accounting Pronouncements</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;">In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09 regarding ASC Topic 606, Revenue from Contracts with Customers.  The standard provides principles for recognizing revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  The guidance is effective for the Company’s fiscal year beginning January 1, 2018.  We evaluated the accounting, transition, and disclosure requirements of the standard and the adoption of this standard will not have a material impact on the financial statements as the Company earns substantially all of its revenue from lease contracts that fall within the scope of AIC Topic 840, which are not within the scope of the new revenue standard.  Additionally, we have historically disposed of properties for cash with no contingencies and no future investment in the properties.  Therefore, the new revenue standard will not impact the recognition of gain or loss from property sales.</div><br/><div style="text-align: justify; font-size: 12.0pt;">In February 2016, the FASB issued ASU 2016-02, which provides guidance for accounting for leases.  The new guidance requires companies to recognize the assets and liabilities for the rights and obligations created by leased assets, initially measured at the present value of the lease payments.  The accounting guidance for lessors is largely unchanged.  The ASU is effective for annual and interim periods beginning after December 15, 2018 with early adoption permitted.  It is to be adopted using a modified retrospective approach.  Management is currently evaluating the impact the adoption of this guidance will have on the Company’s financial statements.</div><br/><div style="text-align: justify; font-size: 12.0pt;">In January 2017, the FASB issued ASU 2017-01, which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.  The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted, and is required to be applied prospectively to any transactions occurring within the period of adoption.  We are currently evaluating the accounting and disclosure requirements of the standard.  We expect the new standard will result in the majority of our real estate acquisitions to be considered asset acquisitions, whereby external acquisition costs related to these asset acquisitions will be capitalized.  Currently, the majority of our real estate acquisitions are considered acquisitions of businesses, whereby all acquisition-related costs are expensed as incurred.  We do not expect the standard to have a significant impact on the allocation of purchase price to tangible and identifiable intangible assets and liabilities acquired based on their respective fair values.</div><br/></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"><font>Financial Statement Presentation</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The accounts of the Company are maintained on the accrual basis of accounting for both federal income tax purposes and financial reporting purposes.</font></div></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"><font>Accounting Estimates</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>Management uses estimates and assumptions in preparing these financial statements in accordance with United States Generally Accepted Accounting Principles (US GAAP).  Those estimates and assumptions may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.  Actual results could differ from those estimates.  Significant items, subject to such estimates and assumptions, include the carrying value of real estate held for investment, real estate held for sale and related intangible assets.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company regularly assesses whether market events and conditions indicate that it is reasonably possible to recover the carrying amounts of its investments in real estate from future operations and sales.  A change in those market events and conditions could have a material effect on the carrying amount of its real estate.</font></div></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"><font>Cash Concentrations of Credit Risk</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company's cash is deposited in one financial institution and at times during the year it may exceed FDIC insurance limits.</font></div></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"><font>Receivables </font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>Credit terms are extended to tenants in the normal course of business.  The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>Receivables are recorded at their estimated net realizable value.  The Company follows a policy of providing an allowance for doubtful accounts; however, based on historical experience, and its evaluation of the current status of receivables, the Company is of the belief that such accounts, if any, will be collectible in all material respects and thus an allowance is not necessary.  Accounts are considered past due if payment is not made on a timely basis in accordance with the Company’s credit terms.  Receivables considered uncollectible are written off.</font></div></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"><font>Income Taxes</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The income or loss of the Company for federal income tax reporting purposes is includable in the income tax returns of the Members.  In general, no recognition has been given to income taxes in the accompanying financial statements.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The tax return and the amount of distributable Company income or loss are subject to examination by federal and state taxing authorities.  If such an examination results in changes to distributable Company income or loss, the taxable income of the members would be adjusted accordingly.  Primarily due to its tax status as a partnership, the Company has no significant tax uncertainties that require recognition or disclosure.  The Company is no longer subject to U.S. federal income tax examinations for tax years before 2014, and with few exceptions, is no longer subject to state tax examinations for tax years before 2014.</font></div></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"><font>Revenue Recognition</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company's real estate is leased under net leases, classified as operating leases.  The leases provide for base annual rental payments payable in monthly installments.  The Company recognizes rental income according to the terms of the individual leases.  For leases that contain stated rental increases, the increases are recognized in the year in which they are effective.  Contingent rental payments are recognized when the contingencies on which the payments are based are satisfied and the rental payments become due under the terms of the leases.</font></div></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"><font>Real Estate</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>Upon acquisition of real properties, the Company records them in the financial statements at cost.  The purchase price is allocated to tangible assets, consisting of land and building, and to identified intangible assets and liabilities, which may include the value of above market and below market leases and the value of in-place leases.  The allocation of the purchase price is based upon the fair value of each component of the property.  Although independent appraisals may be used to assist in the determination of fair value, in many cases these values will be based upon management’s assessment of each property, the selling prices of comparable properties and the discounted value of cash flows from the asset.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The fair values of above market and below market in-place leases will be recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) an estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the non-cancelable term of the lease including any bargain renewal periods.  The above market and below market lease values will be capitalized as intangible lease assets or liabilities.  Above market lease values will be amortized as an adjustment of rental income over the remaining term of the respective leases.  Below market lease values will be amortized as an adjustment of rental income over the remaining term of the respective leases, including any bargain renewal periods.  If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above market and below market in-place lease values relating to that lease would be recorded as an adjustment to rental income.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The fair values of in-place leases will include estimated direct costs associated with obtaining a new tenant, and opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease.  Direct costs associated with obtaining a new tenant may include commissions, tenant improvements, and other direct costs and are estimated, in part, by management’s consideration of current market costs to execute a similar lease.  These direct costs will be included in intangible lease assets on the balance sheet and will be amortized to expense over the remaining term of the respective leases.  The value of opportunity costs will be calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease.  These intangibles will be included in intangible lease assets on the balance sheet and will be amortized to expense over the remaining term of the respective leases.  If a lease were to be terminated prior to its stated expiration, all unamortized amounts of in-place lease assets relating to that lease would be expensed. </font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company tests real estate for recoverability when events or changes in circumstances indicate that the carrying value may not be recoverable.  For properties the Company will hold and operate, it compares the carrying amount of the property to the estimated probability-weighted future undiscounted cash flows expected to result from the property and its eventual disposition.  If the sum of the expected future cash flows is less than the carrying amount of the property, the Company recognizes an impairment loss by the amount by which the carrying amount of the property exceeds the fair value of the property.  For properties held for sale, the Company determines whether impairment has occurred by comparing the property’s estimated fair value less cost to sell to its current carrying value.  If the carrying value is greater than the net realizable value, an impairment loss is recorded to reduce the carrying value of the property to its net realizable value. </font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>For financial reporting purposes, the buildings owned by the Company are depreciated using the straight-line method over an estimated useful life of 25 years.  Intangible lease assets are amortized using the straight-line method for financial reporting purposes based on the remaining life of the lease.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The disposition of a property or classification of a property as Real Estate Held for Sale by the Company does not represent a strategic shift that will have a major effect on the Company’s operations and financial results.  Therefore, the results from operating and selling the property are included in continuing operations.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company accounts for properties owned as tenants-in-common with affiliated entities and/or unrelated third parties using the proportionate consolidation method.  Each tenant-in-common owns a separate, undivided interest in the properties.  Any tenant-in-common that holds more than a 50% interest does not control decisions over the other tenant-in-common interests.  The financial statements reflect only this Company's percentage share of the properties' land, building, liabilities, revenues and expenses.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company’s properties are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which the properties are located.  These laws could require the Company to investigate and remediate the effects of the release or disposal of hazardous materials at these locations if found.  For each property, an environmental assessment is completed prior to acquisition.  In addition, the lease agreements typically strictly prohibit the production, handling, or storage of hazardous materials (except where incidental to the tenant’s business such as use of cleaning supplies) in violation of applicable law to restrict environmental and other damage.  Environmental liabilities are recorded when it is determined the liability is probable and the costs can reasonably be estimated.  There were no environmental issues noted or liabilities recorded at December 31, 2017 and 2016.</font></div></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"><font>Fair Value Measurements</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>As of December 31, 2017 and 2016, the Company had no assets or liabilities measured at fair value on a recurring basis or nonrecurring basis.</font></div></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"><font>Income Per Unit</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>Income per LLC Unit is calculated based on the weighted average number of LLC Units outstanding during each period presented.  Diluted income per LLC Unit considers the effect of any potentially dilutive Unit equivalents, of which the Company had none for each of the years ended December 31, 2017 and 2016.</font></div></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"><font>Reportable Segments</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company invests in single tenant commercial properties throughout the United States that are net leased to tenants in various industries.  Because these net leased properties have similar economic characteristics, the Company evaluates operating performance on an overall portfolio basis.  Therefore, the Company’s properties are classified as one reportable segment.</font></div></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"><font>Recently Issued Accounting Pronouncements</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;">In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09 regarding ASC Topic 606, Revenue from Contracts with Customers.  The standard provides principles for recognizing revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  The guidance is effective for the Company’s fiscal year beginning January 1, 2018.  We evaluated the accounting, transition, and disclosure requirements of the standard and the adoption of this standard will not have a material impact on the financial statements as the Company earns substantially all of its revenue from lease contracts that fall within the scope of AIC Topic 840, which are not within the scope of the new revenue standard.  Additionally, we have historically disposed of properties for cash with no contingencies and no future investment in the properties.  Therefore, the new revenue standard will not impact the recognition of gain or loss from property sales.</div><br/><div style="text-align: justify; font-size: 12.0pt;">In February 2016, the FASB issued ASU 2016-02, which provides guidance for accounting for leases.  The new guidance requires companies to recognize the assets and liabilities for the rights and obligations created by leased assets, initially measured at the present value of the lease payments.  The accounting guidance for lessors is largely unchanged.  The ASU is effective for annual and interim periods beginning after December 15, 2018 with early adoption permitted.  It is to be adopted using a modified retrospective approach.  Management is currently evaluating the impact the adoption of this guidance will have on the Company’s financial statements.</div><br/><div style="text-align: justify; font-size: 12.0pt;">In January 2017, the FASB issued ASU 2017-01, which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.  The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted, and is required to be applied prospectively to any transactions occurring within the period of adoption.  We are currently evaluating the accounting and disclosure requirements of the standard.  We expect the new standard will result in the majority of our real estate acquisitions to be considered asset acquisitions, whereby external acquisition costs related to these asset acquisitions will be capitalized.  Currently, the majority of our real estate acquisitions are considered acquisitions of businesses, whereby all acquisition-related costs are expensed as incurred.  We do not expect the standard to have a significant impact on the allocation of purchase price to tangible and identifiable intangible assets and liabilities acquired based on their respective fair values.</div></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>(3)  Related Party Transactions –</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;">The Company owns the percentage interest shown below in the following properties as tenants-in-common with the affiliated entities listed:  property in Wichita, Kansas (40% – AEI Income & Growth Fund 25 LLC); Advance Auto Parts store (55% – AEI Income & Growth Fund 24 LLC); Applebee’s restaurant in Crawfordsville, Indiana (40% – AEI Income & Growth Fund XXII Limited Partnership); Best Buy store (30% – AEI Income & Growth Fund XXI Limited Partnership and AEI Income & Growth Fund 23 LLC); Dick’s Sporting Goods store in Fredericksburg, Virginia (27% – AEI Income & Growth Fund 23 LLC, AEI Income & Growth Fund 24 LLC and AEI Income & Growth Fund 25 LLC); and Fresenius Medical Center (54% – AEI Income & Growth Fund 27 LLC).</div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>AEI received the following reimbursements for costs and expenses from the Company for the years ended December 31:</font> </div><br/><table style="border-spacing: 0px; border-collapse: collapse; margin: auto;"> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"> <font style="text-decoration: underline;">2017</font> </div> </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"> <font style="text-decoration: underline;">2016</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; vertical-align: middle;"> <div> <font>AEI is reimbursed for costs incurred in providing services related to managing the Company’s operations and properties, maintaining the Company’s books, and communicating with the Limited Members.</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">144,461</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">149,251</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>AEI is reimbursed for all direct expenses it paid on the Company’s behalf to third parties related to Company administration and property management.  These expenses included printing costs, legal and filing fees, direct administrative costs, outside audit costs, taxes, insurance and other property costs.</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">119,101</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">102,892</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>AEI is reimbursed for costs incurred in providing services and direct expenses related to the acquisition of properties on behalf of the Company.</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">0</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">55,479</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> </tr> </table><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The payable to AEI Fund Management, Inc. represents the balance due for the services described in 3a, b and c.  This balance is non-interest bearing and unsecured and is to be paid in the normal course of business.</font> </div><br/></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> Related Party Transactions<br /><br /><table style="border-spacing: 0px; border-collapse: collapse; margin: auto;"> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"> <font style="text-decoration: underline;">2017</font> </div> </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"> <font style="text-decoration: underline;">2016</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; vertical-align: middle;"> <div> <font>AEI is reimbursed for costs incurred in providing services related to managing the Company’s operations and properties, maintaining the Company’s books, and communicating with the Limited Members.</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">144,461</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">149,251</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>AEI is reimbursed for all direct expenses it paid on the Company’s behalf to third parties related to Company administration and property management.  These expenses included printing costs, legal and filing fees, direct administrative costs, outside audit costs, taxes, insurance and other property costs.</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">119,101</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">102,892</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>AEI is reimbursed for costs incurred in providing services and direct expenses related to the acquisition of properties on behalf of the Company.</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">0</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">55,479</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 21.6pt; padding-left: 5.75pt; padding-right: 5.75pt;">  </td> <td style="width: 284.4pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;">  </td> </tr> </table></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>(4)  Real Estate Investments –</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;">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.  </div><br/><div style="text-align: justify; font-size: 12.0pt;">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.</div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The cost of the properties not held for sale and related accumulated depreciation at December 31, 2017 are as follows:</font> </div><br/><table style="border-spacing: 0px; border-collapse: collapse; margin: auto;"> <tr style="height: 0px;"> <td style="width: 213.85pt;"> </td> <td style="width: 7.2pt;"> </td> <td style="width: 57.6pt;"> </td> <td style="width: 9.35pt;"> </td> <td style="width: 57.6pt;"> </td> <td style="width: 9.35pt;"> </td> <td style="width: 57.6pt;"> </td> <td style="width: 9.35pt;"> </td> <td style="width: 57.6pt;"> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> <div><font style="text-decoration: underline;">Property</font></div> </td> <td style="vertical-align: bottom;" colspan="2"> <div style="text-align: center;"><font style="text-decoration: underline;">Land</font></div> </td> <td style="vertical-align: bottom;" colspan="2"> <div style="text-align: center;"><font style="text-decoration: underline;">Buildings</font></div> </td> <td style="vertical-align: bottom;" colspan="2"> <div style="text-align: center;"><font style="text-decoration: underline;">Total</font></div> </td> <td style="vertical-align: bottom;" colspan="2"> <div style="text-align: center;">Accumulated</div> <div style="text-align: center;"><font style="text-decoration: underline;">Depreciation</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Biomat USA Plasma Center, Wichita, KS</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">507,489</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,277,436</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,784,925</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">683,949</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Advance Auto Parts, Middletown, OH</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">112,315</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">909,974</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,022,289</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">421,624</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Applebee’s, Crawfordsville, IN</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">337,353</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">900,418</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,237,771</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">396,185</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Cellular Connection, Bluffton, IN</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">344,008</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">836,108</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,180,116</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">335,896</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Best Buy, Eau Claire, WI</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">474,137</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,547,025</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">2,021,162</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">613,651</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="padding-left: 5.75pt; vertical-align: middle;" colspan="2"> <div>Dick’s Sporting Goods, Fredericksburg, VA</div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,603,559</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,523,044</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">3,126,603</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">633,802</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Fresenius Medical Center, Chicago, IL</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">464,400</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">665,142</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,129,542</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">79,814</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Zales, Enid, OK</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">440,000</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">903,630</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,343,630</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">100,903</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Dollar Tree, West Point, MS</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">270,000</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">1,316,232</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">1,586,232</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">100,910</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">4,553,261</font></div> </td> <td style="width: 9.35pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">9,879,009</font></div> </td> <td style="width: 9.35pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">14,432,270</font></div> </td> <td style="width: 9.35pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">3,366,734</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 9.35pt; vertical-align: bottom;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 9.35pt; vertical-align: bottom;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 9.35pt; vertical-align: bottom;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> </tr> </table><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>For the years ended December 31, 2017 and 2016, the Company recognized depreciation expense of $396,640 and $390,890, respectively.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;">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.</div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The following schedule presents the cost and related accumulated amortization of acquired lease intangibles not held for sale at December 31:</font> </div><br/><table style="border-spacing: 0px; border-collapse: collapse; margin: auto;"> <tr style="height: 0px;"> <td style="width: 216.0pt;"> </td> <td style="width: 7.2pt;"> </td> <td style="width: 52.55pt;"> </td> <td style="width: 7.2pt;"> </td> <td style="width: 64.8pt;"> </td> <td style="width: 7.2pt;"> </td> <td style="width: 52.55pt;"> </td> <td style="width: 7.2pt;"> </td> <td style="width: 64.8pt;"> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="vertical-align: bottom;" colspan="3"> <div style="border-bottom: 1pt solid black; text-align: center;">2017</div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="vertical-align: bottom;" colspan="3"> <div style="border-bottom: 1pt solid black; text-align: center;">2016</div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: center;">Cost</div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: center;">Accumulated Amortization</div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: center;">Cost</div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: center;">Accumulated Amortization</div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> <div>In-Place Lease Intangibles</div> <div>   <font style="font-size: 8.0pt;">(weighted average life of 97 and 107 months, respectively)</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">633,712</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">136,879</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">579,419</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">80,199</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> <div>Above-Market Lease Intangibles</div> <div>   <font style="font-size: 8.0pt;">(weighted average life of 82 and 94 months, respectively)</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">72,606</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">20,834</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">72,606</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">13,258</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> <div>          Acquired Intangible Lease Assets</div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">706,318</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">157,713</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">652,025</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">93,457</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; vertical-align: bottom;"> <div>Acquired Below-Market Lease Intangibles</div> <div>   <font style="font-size: 8.0pt;">(weighted average life of 93 and 105 months, respectively)</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">283,495</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">54,236</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">283,495</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">24,652</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> </tr> </table><br/><div style="text-align: justify; font-size: 12.0pt;">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.</div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>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.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;">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.</div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>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 $30,000 that was capitalized and will be depreciated.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>For properties owned as of December 31, 2017, the minimum future rent payments required by the leases are as follows:</font> </div><br/><table style="border-spacing: 0px; border-collapse: collapse; margin: auto;"> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div><font style="font-size: 11.0pt;">2018</font></div> </td> <td style="width: 10.8pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">939,273</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div><font style="font-size: 11.0pt;">2019</font></div> </td> <td style="width: 10.8pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">714,365</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div><font style="font-size: 11.0pt;">2020</font></div> </td> <td style="width: 10.8pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">660,206</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div><font style="font-size: 11.0pt;">2021</font></div> </td> <td style="width: 10.8pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">664,649</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div><font style="font-size: 11.0pt;">2022</font></div> </td> <td style="width: 10.8pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">673,024</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div><font style="font-size: 11.0pt;">Thereafter</font></div> </td> <td style="width: 10.8pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">1,632,675</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 10.8pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">5,284,192</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 10.8pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> </td> </tr> </table><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>There were no contingent rents recognized in 2017 and 2016.</font> </div><br/></div>

30000

396640

390890

2016-02-03

1535714

232977

283495

55479

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)

107500

56680

52627

7576

29584

24652

59621

62108

7576

29584

0.1313 0.0946 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.

37071

113000

54293

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.

39156

30000

<div style="font-family: Times New Roman; font-size: 12.0pt; "> Properties not held for sale<br /><br /><table style="border-spacing: 0px; border-collapse: collapse; margin: auto;"> <tr style="height: 0px;"> <td style="width: 213.85pt;"> </td> <td style="width: 7.2pt;"> </td> <td style="width: 57.6pt;"> </td> <td style="width: 9.35pt;"> </td> <td style="width: 57.6pt;"> </td> <td style="width: 9.35pt;"> </td> <td style="width: 57.6pt;"> </td> <td style="width: 9.35pt;"> </td> <td style="width: 57.6pt;"> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> <div><font style="text-decoration: underline;">Property</font></div> </td> <td style="vertical-align: bottom;" colspan="2"> <div style="text-align: center;"><font style="text-decoration: underline;">Land</font></div> </td> <td style="vertical-align: bottom;" colspan="2"> <div style="text-align: center;"><font style="text-decoration: underline;">Buildings</font></div> </td> <td style="vertical-align: bottom;" colspan="2"> <div style="text-align: center;"><font style="text-decoration: underline;">Total</font></div> </td> <td style="vertical-align: bottom;" colspan="2"> <div style="text-align: center;">Accumulated</div> <div style="text-align: center;"><font style="text-decoration: underline;">Depreciation</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Biomat USA Plasma Center, Wichita, KS</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">507,489</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,277,436</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,784,925</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">683,949</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Advance Auto Parts, Middletown, OH</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">112,315</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">909,974</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,022,289</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">421,624</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Applebee’s, Crawfordsville, IN</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">337,353</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">900,418</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,237,771</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">396,185</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Cellular Connection, Bluffton, IN</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">344,008</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">836,108</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,180,116</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">335,896</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Best Buy, Eau Claire, WI</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">474,137</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,547,025</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">2,021,162</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">613,651</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="padding-left: 5.75pt; vertical-align: middle;" colspan="2"> <div>Dick’s Sporting Goods, Fredericksburg, VA</div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,603,559</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,523,044</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">3,126,603</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">633,802</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Fresenius Medical Center, Chicago, IL</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">464,400</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">665,142</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,129,542</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">79,814</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Zales, Enid, OK</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">440,000</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">903,630</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">1,343,630</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">100,903</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Dollar Tree, West Point, MS</div> </td> <td style="width: 7.2pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">270,000</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">1,316,232</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">1,586,232</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">100,910</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">4,553,261</font></div> </td> <td style="width: 9.35pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">9,879,009</font></div> </td> <td style="width: 9.35pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">14,432,270</font></div> </td> <td style="width: 9.35pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">3,366,734</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 213.85pt; padding-left: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 9.35pt; vertical-align: bottom;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 9.35pt; vertical-align: bottom;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 9.35pt; vertical-align: bottom;"> </td> <td style="width: 57.6pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> </tr> </table></div>

507489

1277436

1784925

683949

112315

909974

1022289

421624

337353

900418

1237771

396185

344008

836108

1180116

335896

474137

1547025

2021162

613651

1603559

1523044

3126603

633802

464400

665142

1129542

79814

440000

903630

1343630

100903

270000

1316232

1586232

100910

4553261

9879009

14432270

3366734

<div style="font-family: Times New Roman; font-size: 12.0pt; "> Acquired lease intangibles not held for sale<br /><br /><table style="border-spacing: 0px; border-collapse: collapse; margin: auto;"> <tr style="height: 0px;"> <td style="width: 216.0pt;"> </td> <td style="width: 7.2pt;"> </td> <td style="width: 52.55pt;"> </td> <td style="width: 7.2pt;"> </td> <td style="width: 64.8pt;"> </td> <td style="width: 7.2pt;"> </td> <td style="width: 52.55pt;"> </td> <td style="width: 7.2pt;"> </td> <td style="width: 64.8pt;"> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="vertical-align: bottom;" colspan="3"> <div style="border-bottom: 1pt solid black; text-align: center;">2017</div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="vertical-align: bottom;" colspan="3"> <div style="border-bottom: 1pt solid black; text-align: center;">2016</div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: center;">Cost</div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: center;">Accumulated Amortization</div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: center;">Cost</div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: center;">Accumulated Amortization</div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> <div>In-Place Lease Intangibles</div> <div>   <font style="font-size: 8.0pt;">(weighted average life of 97 and 107 months, respectively)</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">633,712</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">136,879</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">579,419</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">80,199</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> <div>Above-Market Lease Intangibles</div> <div>   <font style="font-size: 8.0pt;">(weighted average life of 82 and 94 months, respectively)</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">72,606</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">20,834</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">72,606</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">13,258</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> <div>          Acquired Intangible Lease Assets</div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">706,318</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">157,713</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">652,025</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">93,457</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; vertical-align: bottom;"> <div>Acquired Below-Market Lease Intangibles</div> <div>   <font style="font-size: 8.0pt;">(weighted average life of 93 and 105 months, respectively)</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">283,495</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">54,236</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">283,495</font></div> </td> <td style="width: 7.2pt; vertical-align: bottom;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">24,652</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 216.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 52.55pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt; vertical-align: bottom;"> </td> <td style="width: 64.8pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> </tr> </table></div>

633712

136879

579419

80199

72606

20834

72606

13258

706318

157713

652025

93457

283495

54236

283495

24652

P97M

P107M

P82M

P94M

P93M

P105M

<div style="font-family: Times New Roman; font-size: 12.0pt; "> Minimum future rent<br /><br /><table style="border-spacing: 0px; border-collapse: collapse; margin: auto;"> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div><font style="font-size: 11.0pt;">2018</font></div> </td> <td style="width: 10.8pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">939,273</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div><font style="font-size: 11.0pt;">2019</font></div> </td> <td style="width: 10.8pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">714,365</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div><font style="font-size: 11.0pt;">2020</font></div> </td> <td style="width: 10.8pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">660,206</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div><font style="font-size: 11.0pt;">2021</font></div> </td> <td style="width: 10.8pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">664,649</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div><font style="font-size: 11.0pt;">2022</font></div> </td> <td style="width: 10.8pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">673,024</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div><font style="font-size: 11.0pt;">Thereafter</font></div> </td> <td style="width: 10.8pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">1,632,675</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 10.8pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">5,284,192</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 90.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 10.8pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> </td> </tr> </table></div>

939273

714365

660206

664649

673024

1632675

5284192

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>(5)  Major Tenants –</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The following schedule presents rental income from individual tenants, or affiliated groups of tenants, who each contributed more than ten percent of the Company's total rental income for the years ended December 31:</font> </div><br/><table style="border-spacing: 0px; border-collapse: collapse; margin: auto;"> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div><font style="text-decoration: underline;">Tenants</font></div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"><font style="text-decoration: underline;">2017</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"><font style="text-decoration: underline;">2016</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div>Dick’s Sporting Goods, Inc.</div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">232,950</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">232,950</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div>Best Buy Stores, L.P.</div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">149,334</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">149,334</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div>Dollar Tree Stores, Inc.</div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">137,084</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">122,576</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div>Apple Indiana II LLC</div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">103,184</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">0</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div>Zale Delaware Inc.</div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">98,024</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">0</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Aggregate rental income of major tenants</div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">720,576</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">504,860</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; vertical-align: bottom;"> <div>Aggregate rental income of major tenants</div> <div>as a percentage of total rental income</div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 9.35pt; vertical-align: bottom;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">76%</font></div> </td> <td style="width: 9.35pt; vertical-align: bottom;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">48%</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 9.35pt; vertical-align: bottom;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 9.35pt; vertical-align: bottom;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> </tr> </table><br/></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> Major Tenants<br /><br /><table style="border-spacing: 0px; border-collapse: collapse; margin: auto;"> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div><font style="text-decoration: underline;">Tenants</font></div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"><font style="text-decoration: underline;">2017</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"><font style="text-decoration: underline;">2016</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div>Dick’s Sporting Goods, Inc.</div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">232,950</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">232,950</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div>Best Buy Stores, L.P.</div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">149,334</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">149,334</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div>Dollar Tree Stores, Inc.</div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">137,084</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">122,576</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div>Apple Indiana II LLC</div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">103,184</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">0</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div>Zale Delaware Inc.</div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">98,024</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 1pt solid black; text-align: right;"><font style="font-size: 11.0pt;">0</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; vertical-align: middle;"> <div>Aggregate rental income of major tenants</div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> </td> <td style="width: 9.35pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">720,576</font></div> </td> <td style="width: 9.35pt; vertical-align: middle;"> <div style="text-align: right;"><font style="font-size: 11.0pt;">$</font></div> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">504,860</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; vertical-align: bottom;"> <div>Aggregate rental income of major tenants</div> <div>as a percentage of total rental income</div> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 9.35pt; vertical-align: bottom;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">76%</font></div> </td> <td style="width: 9.35pt; vertical-align: bottom;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"><font style="font-size: 11.0pt;">48%</font></div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 230.4pt; padding-left: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 7.2pt;"> </td> <td style="width: 79.2pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 9.35pt; vertical-align: bottom;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> <td style="width: 9.35pt; vertical-align: bottom;"> </td> <td style="width: 72.0pt; padding-right: 5.75pt; vertical-align: bottom;"> </td> </tr> </table></div>

232950

149334

137084

122576

103184

98024

720576

504860

0.76

0.48

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>(6)  Members’ Capital –</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>For the years ended December 31, 2017 and 2016, the Company declared distributions of $679,998 and $809,870, respectively.  The Limited Members received distributions of $660,002 and $787,998 and the Managing Members received distributions of $19,996 and $21,872 for the years, respectively.  The Limited Members' distributions represented $0.38 and $0.45 per LLC Unit outstanding using 1,739,506 and 1,746,715 weighted average Units in 2017 and 2016, respectively.  The distributions represented $0.11 and $0.13 per Unit of Net Income and $0.27 and $0.32 per Unit of return of contributed capital in 2017 and 2016, respectively.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>As part of the distributions discussed above, the Company distributed net sale proceeds (from property sales completed in 2015) of $20,202 and $121,212 in 2017 and 2016, respectively.  The Limited Members received distributions of $20,000 and $120,000 and the Managing Members received distributions of $202 and $1,212 for the years, respectively.  The Limited Members’ distributions represented $0.01 and $0.07 per Unit for the years, respectively.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The Company may repurchase Units from Limited Members who have tendered their Units to the Company.  Such Units may be acquired at a discount.  The Company will not be obligated to purchase in any year more than 2% of the total number of Units outstanding on January 1 of such year.  In no event shall the Company be obligated to purchase Units if, in the sole discretion of the Managing Member, such purchase would impair the capital or operation of the Company.</font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>On April 1, 2017, the Company repurchased a total of 6,000.0 Units for $36,332 from three Limited Members in accordance with the Operating Agreement.  On April 1, 2016, the Company repurchased a total of 10,835.5 Units for $75,397 from six Limited Members.  The Company acquired these Units using Net Cash Flow from operations.  The repurchases increase the remaining Limited Members’ ownership interest in the Company.  As a result of these repurchases and pursuant to the Operating Agreement, the Managing Members received distributions of $1,124 and $2,332 in 2017 and 2016, respectively.</font> </div><br/></div>

0.38

0.45

1739506

1746715

0.11 0.13 0.27 0.32 20202 121212 20000 120000 202 1212 0.01 0.07

<div style="font-family: Times New Roman; font-size: 12.0pt; "> <div style="text-align: justify; font-size: 12.0pt; font-weight: bold;"> <font>(7)  Income Taxes – </font> </div><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The following is a reconciliation of net income for financial reporting purposes to income reported for federal income tax purposes for the years ended December 31:</font> </div><br/><table style="border-spacing: 0px; border-collapse: collapse; margin: auto;"> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"> <font style="text-decoration: underline;">2017</font> </div> </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"> <font style="text-decoration: underline;">2016</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Net Income for Financial Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">228,997</font> </div> </td> <td style="width: 23.75pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">302,853</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Depreciation for Tax Purposes Under Depreciation</font> </div> <div> <font>    and Amortization for Financial Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">128,943</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">129,379</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Income Accrued for Tax Purposes Over (Under)</font> </div> <div> <font>    Income for Financial Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">0</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">19,366</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Acquisition Costs Expensed for Financial Reporting</font> </div> <div> <font>    Purposes, Capitalized for Tax Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"> <font style="font-size: 11.0pt;">0</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"> <font style="font-size: 11.0pt;">55,479</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="margin-left: 36.0pt;"> <font>Taxable Income to Members</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">357,940</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">507,077</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> </table><br/><div style="text-align: justify; font-size: 12.0pt;"> <font>The following is a reconciliation of Members’ Equity for financial reporting purposes to Members’ Equity reported for federal income tax purposes for the years ended December 31:</font> </div><br/><table style="border-spacing: 0px; border-collapse: collapse; margin: auto;"> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"> <font style="text-decoration: underline;">2017</font> </div> </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"> <font style="text-decoration: underline;">2016</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Members’ Equity for Financial Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">11,655,674</font> </div> </td> <td style="width: 23.75pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">12,144,131</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Adjusted Tax Basis of Investments in Real Estate</font> </div> <div> <font>    Over Net Investments in Real Estate</font> </div> <div> <font>    for Financial Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">1,626,933</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">1,497,990</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Income Accrued for Tax Purposes Over</font> </div> <div> <font>    Income for Financial Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">19,366</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">19,366</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Syndication Costs Treated as Reduction</font> </div> <div> <font>    of Capital For Financial Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"> <font style="font-size: 11.0pt;">2,691,997</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"> <font style="font-size: 11.0pt;">2,691,997</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="margin-left: 36.0pt;"> <font>Members’ Equity for Tax Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">15,993,970</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">16,353,484</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> </table><br/></div>

<div style="font-family: Times New Roman; font-size: 12.0pt; "> Reconciliation of net income for financial reporting<br /><br /><table style="border-spacing: 0px; border-collapse: collapse; margin: auto;"> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"> <font style="text-decoration: underline;">2017</font> </div> </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"> <font style="text-decoration: underline;">2016</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Net Income for Financial Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">228,997</font> </div> </td> <td style="width: 23.75pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">302,853</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Depreciation for Tax Purposes Under Depreciation</font> </div> <div> <font>    and Amortization for Financial Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">128,943</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">129,379</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Income Accrued for Tax Purposes Over (Under)</font> </div> <div> <font>    Income for Financial Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">0</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">19,366</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Acquisition Costs Expensed for Financial Reporting</font> </div> <div> <font>    Purposes, Capitalized for Tax Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"> <font style="font-size: 11.0pt;">0</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"> <font style="font-size: 11.0pt;">55,479</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="margin-left: 36.0pt;"> <font>Taxable Income to Members</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">357,940</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">507,077</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> </table></div> 128943 129379 0 19366 0 55479 357940 507077 <div style="font-family: Times New Roman; font-size: 12.0pt; "> Reconciliation of Members’ Equity for financial reporting<br /><br /><table style="border-spacing: 0px; border-collapse: collapse; margin: auto;"> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"> <font style="text-decoration: underline;">2017</font> </div> </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: center;"> <font style="text-decoration: underline;">2016</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Members’ Equity for Financial Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">11,655,674</font> </div> </td> <td style="width: 23.75pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">12,144,131</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Adjusted Tax Basis of Investments in Real Estate</font> </div> <div> <font>    Over Net Investments in Real Estate</font> </div> <div> <font>    for Financial Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">1,626,933</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">1,497,990</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Income Accrued for Tax Purposes Over</font> </div> <div> <font>    Income for Financial Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">19,366</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="text-align: right;"> <font style="font-size: 11.0pt;">19,366</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;"> <div> <font>Syndication Costs Treated as Reduction</font> </div> <div> <font>    of Capital For Financial Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"> <font style="font-size: 11.0pt;">2,691,997</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 1pt solid black; text-align: right;"> <font style="font-size: 11.0pt;">2,691,997</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="margin-left: 36.0pt;"> <font>Members’ Equity for Tax Reporting Purposes</font> </div> </td> <td style="width: 8.65pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">15,993,970</font> </div> </td> <td style="width: 23.75pt; vertical-align: bottom;"> <div style="margin-bottom: 2.0pt; text-align: right;"> <font style="font-size: 11.0pt;">$</font> </div> </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: bottom;"> <div style="border-bottom: 3px double black; text-align: right;"> <font style="font-size: 11.0pt;">16,353,484</font> </div> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 306.0pt; padding-left: 5.75pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 8.65pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> <td style="width: 23.75pt; vertical-align: middle;">  </td> <td style="width: 70.55pt; padding-right: 5.75pt; vertical-align: middle;">  </td> </tr> </table></div>

11655674

12144131

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