REAL ESTATE ACQUISITIONS AND HELD FOR SALE

12 Months Ended

Jun. 30, 2024

REAL ESTATE ACQUISITIONS AND HELD FOR SALE [Abstract]

REAL ESTATE ACQUISITIONS AND HELD FOR SALE

NOTE 5 – REAL ESTATE ACQUISITIONS AND HELD FOR SALE

As discussed in Note 1, in September 2023, 220 Campus Lane and Campus Lane Residential acquired the vacant 220 Campus Lane Office Building and the adjacent vacant parcel of land for a total purchase price of $4,473,756, of which $3,300,000 was funded through seller-financed non-recourse loans.

In addition, as discussed in Note 1, on January 1, 2024, the Operating Partnership acquired 100% membership interest in GVEC, which owns Green Valley Executive Center from an affiliate of our Advisers, for a total purchase price of $8,703,127, which was paid through issuance of 386,805.64 Series A Preferred Units of the Operating Partnership. The acquisition of GVEC was approved by our independent Board of Directors.

Additionally, as discussed in Note 1, on May 1, 2024, the Operating Partnership completed the acquisition of 100% limited partnership interest in One Harbor Center for a total purchase price of $3,796,463, of which $2,647,620 was paid through the issuance of 74,459.11 Series A Preferred Units and 43,212.86 Series B Preferred Units of the Operating Partnership. 

Contingent Consideration

As discussed in Note 1, pursuant to the membership interest purchase agreement for the Wiseman partnerships, the purchase price paid at closing for the general partnership interests was reduced by 20% as of the closing date for the property companies that had not received fully executed and in force leases, the annualized scheduled rents of which are equal to or greater than the target scheduled rent as stated in the membership interest purchase agreement. This 20% holdback will be paid upon a property company reaching the stabilization threshold, reduced by stabilization costs, as defined in the membership interest purchase agreement. Management believes that it is probable that the stabilization thresholds will be reached for each of the property companies that did not meet this threshold at the acquisition date. Hence, the 20% holdback in the amount of $2,715,000 was recorded as a contingent liability as of the acquisition date. As of June 30, 2023, the contingent liability amounted to $1,503,000, which was paid in full as of June 30, 2024.

Held for Sale

In August 2024, the Company decided to list Hollywood Apartments for sale and met the criteria to be classified as held for sale. Accordingly, the asset will be classified as an asset held for sale in our consolidated financial statements as of September 30, 2024.