(4) Real Estate Investments –

The Company leases its properties to tenants under net leases, classified as operating leases. Under a net lease, the tenant is responsible for real estate taxes, insurance, maintenance, repairs and operating expenses for the property. For some leases, the Company is responsible for repairs to the structural components of the building, the roof and the parking lot. At the time the properties were acquired, the remaining primary lease terms varied from 10 to 20 years. The leases provide the tenants with three to four five-year renewal options subject to the same terms and conditions as the primary term. The lease for the Best Buy store was extended to end on January 19, 2023.

The Company's properties are commercial, single-tenant buildings. The building in Wichita, Kansas was constructed in 1996, renovated in 2001 and acquired in 2006. The Advance Auto Parts store was constructed in 2004 and acquired in 2006. The Applebee’s restaurant in Crawfordsville, Indiana was constructed in 1996 and acquired in 2006. The Starbucks restaurant was constructed and acquired in 2007. The Best Buy store was constructed in 1990, renovated in 1997 and acquired in 2008. The land for the Dick’s Sporting Goods store was acquired in 2007 and construction of the store was completed in 2008. The Fresenius Medical Center was constructed in 2012 and acquired in 2014. The Zales store was constructed in 1983, renovated in 2014 and acquired in 2015. The Dollar Tree store was constructed in 2015 and acquired in 2016. There have been no costs capitalized as improvements subsequent to the acquisitions, except for $30,000 of tenant improvements related to the Cellular Connection store.

The cost of the properties not held for sale and related accumulated depreciation at December 31, 2018 are as follows:


Property	Land		Buildings		Total		Accumulated Depreciation

Biomat USA Plasma Center, Wichita, KS	$	507,489	$	1,277,436	$	1,784,925	$	728,461
Advance Auto Parts, Middletown, OH		112,315		909,974		1,022,289		458,024
Cellular Connection, Bluffton, IN		344,008		836,108		1,180,116		373,596
Best Buy, Eau Claire, WI		474,137		1,547,025		2,021,162		675,531
Dick’s Sporting Goods, Fredericksburg, VA		1,053,836		1,241,794		2,295,630		702,630
Fresenius Medical Center, Chicago, IL		464,400		665,142		1,129,542		106,418
Zales, Enid, OK		440,000		903,630		1,343,630		137,047
Dollar Tree, West Point, MS		270,000		1,316,232		1,586,232		153,558
	$	3,666,185	$	8,697,341	$	12,363,526	$	3,335,265

For the years ended December 31, 2018 and 2017, the Company recognized depreciation expense of $400,732 and $396,640, respectively.

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


		2018				2017
		Cost		Accumulated Amortization		Cost		Accumulated Amortization
In-Place Lease Intangibles (weighted average life of 85 and 97 months, respectively)	$	633,712	$	196,500	$	633,712	$	136,879

Above-Market Lease Intangibles (weighted average life of 70 and 82 months, respectively)		72,606		28,410		72,606		20,834
Acquired Intangible Lease Assets	$	706,318	$	224,910	$	706,318	$	157,713

Acquired Below-Market Lease Intangibles (weighted average life of 81 and 93 months, respectively)	$	283,495	$	83,820	$	283,495	$	54,236

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

The Company owns a 40% interest in a former Sports Authority store in Wichita, Kansas. On March 2, 2016, the tenant, TSA Stores, Inc., and its parent company, The Sports Authority, Inc., the guarantor of the lease, filed for Chapter 11 bankruptcy reorganization. In June 2016, the tenant filed a motion with the bankruptcy court to reject the lease for this store effective June 30, 2016, at which time the tenant returned possession of the property to the owners. As of December 31, 2018, 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.

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, which commenced on June 18, 2018, is $37,071. Biomat agreed to pay for the costs to divide the building into two separate spaces, the costs of tenant improvements to remodel the Biomat space and 28% of the cost to replace the roof. In the second quarter of 2018, the Company recorded $54,219 as a property expense for its 40% share of the remaining cost to replace the roof. At December 31, 2017, the Company accrued its 40% share of lease commissions due to real estate brokers totaling $54,293 that were owed as part of the lease transaction. This amount was capitalized and will be amortized over the term of the lease. The Company is continuing to pursue additional tenants for the remaining space.

On March 31, 2017, the lease term ended 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.

The Company owns a 27% interest in a Dick’s Sporting Goods store in Fredericksburg, Virginia. The remaining interests in the property are owned by three affiliates of the Company. On January 31, 2019, the lease term ended, and the tenant returned possession of the property to the owners. While the property is vacant, the Company is responsible for its 27% share of real estate taxes and other costs associated with maintaining the property. The owners have listed the property for lease with a real estate broker in the Fredericksburg area. The annual rent from this property represented approximately 24% 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 first quarter of 2019, the Company reduced its regular quarterly cash distribution rate from $0.0949 per Unit to $0.0527 per Unit.

Based on its long-lived asset valuation analysis, the Company determined the Dick’s Sporting Goods store was impaired. As a result, in the fourth quarter of 2018, a charge to operations for real estate impairment of $830,973 was recognized, which was the difference between the carrying value at December 31, 2018 of $2,423,973 and the estimated fair value of $1,593,000. The charge was recorded against the cost of the land and building.

In December 2018, the Company decided to sell the Applebee’s restaurant in Crawfordsville, Indiana. In January 2019, the Company entered into an agreement to sell the property to an unrelated third party. The sale is subject to contingencies and may not be completed. If the sale is completed, the Company expects to receive net proceeds of approximately $1,242,000, which will result in a net gain of approximately $436,400. At December 31, 2018, the property was classified as Real Estate Held for Sale with a carrying value of $805,570.

For properties owned as of December 31, 2018, the minimum future rent payments required by the leases are as follows:

2019	$	714,367
2020		660,207
2021		664,650
2022		673,025
2023		497,502
Thereafter		1,135,177
	$	4,344,928

There were no contingent rents recognized in 2018 and 2017.